By Milcah Tanimu

A recent report from the Central Bank of Nigeria (CBN) highlights that Nigerians are increasingly relying on loans amidst soaring inflation rates. In January 2024 alone, consumer credit surged by 12%, totaling approximately ₦3.9 billion.

The CBN’s monthly economic report reveals that total consumer credit outstanding rose to N3,823 billion during this period. Personal loans saw a significant increase of 14.3%, reaching N3,028 billion from N2,649 billion in December 2023. Meanwhile, retail loans also rose by 4%, amounting to N795 billion, with personal loans comprising 79% of all consumer credit and retail loans making up the remaining 21%.

The headline inflation rate, as reported by the National Bureau of Statistics (NBS), soared to 33.95% by May 2024. In response, the CBN has consecutively raised interest rates to 26.25%, reflecting efforts to curb inflationary pressures.

Amidst these economic challenges, a study by SBM Intelligence found that 27% of Nigerians across various income brackets are increasingly turning to loan apps to manage daily expenses amidst record inflation. This growing reliance on loans underscores the severe impact of inflation on the livelihoods of Nigerians, highlighting the deepening economic crisis in the country.