Personal loans will reach N1.75 trillion in Q4 2022 due to high borrowing costs.

Personal loans fell to 1.75 trillion in the fourth quarter of 2022, down from 1.85 trillion in the third quarter, according to the Central Bank of Nigeria.

To combat rising inflation, the Central Bank of Nigeria increased its Monetary Policy Rate, also known as the interest rate, from 11.5 percent to 18 percent in the last six months.

Despite the rate hike, Nigeria's inflation rate has continued to rise, reaching 22.22 percent in April.

Consequently, the consumer loan declined by 3.5 per cent from N2.4tn in Q3 to N2.32 in Q4 2022.

The report read, “Consumer credit declined owing to the higher cost of borrowing following the 250-basis points policy rate hike that characterised the period.

“Consumer credit declined by 3.5 per cent to N2,318.63 billion at the end of the fourth quarter of 2022 from N2,402.67 billion recorded in the preceding quarter.

“Consequently, consumer credit as a share of total claims on the private sector declined by 0.6 percentage points to 8.1 per cent, from 8.7 per cent in the preceding quarter.”

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