The rising cost of living in Nigeria has prompted a sharp increase in personal loans as individuals seek to maintain their standard of living and alleviate inflationary pressures. According to the latest data from the Central Bank of Nigeria (CBN), the total value of personal credit surged by 14.3 per cent to N3.03 trillion in just one month, with Nigerians obtaining credit facilities worth N3.82tn from financial institutions in January 2024.
This surge in personal loans is a direct response to the elevated cost of living, with the CBN’s report attributing the 11.9 per cent increase in total consumer credit to the rise in personal loans driven by heightened inflation. The substantial increase in personal loans, which grew by 14.3 per cent to N3.028tn from N2.648tn in December 2023, showcases the significant impact of inflation on individuals’ purchasing power.
In addition, the report highlights that personal loans accounted for 79.2 per cent of consumer credit, underscoring the magnitude of Nigerians’ struggle with persistent inflation and diminishing purchasing power. With the cost of living continuing to rise, individuals are increasingly turning to personal loans in a bid to sustain their lifestyles and manage the impact of inflation.
The rising cost of living in Nigeria has led to a considerable surge in personal loans, with Nigerians borrowing a total value of N3.82tn in January 2024 from banks in a bid to cope with inflationary pressures. As individuals strive to maintain their standards of living amidst mounting economic challenges, the impact of inflation on consumer behavior is evident in the sharp increase in personal credit. This trend underscores the urgent need for measures to address the underlying factors driving the escalating cost of living and its implications on the financial well-being of Nigerians.
