Nigerians are increasingly turning to loans to survive as inflation rises, according to a report by the Central Bank of Nigeria (CBN). Consumer credit rose by 12% to nearly ₦3.9 billion in January 2024, driven largely by soaring inflation.

The CBN’s latest economic report revealed that total outstanding consumer credit reached ₦3,823 billion in January 2024. Personal loans saw a significant increase of 14.3%, rising to ₦3,028 billion from ₦2,649 billion in December 2023. Retail loans also increased by 4%, reaching ₦795 billion. Personal loans now account for 79% of consumer credit, while retail loans make up 21%.

Despite the rise in consumer credit, its share of total credit from Online Data Capture Systems (ODCs) dropped to 7% from 8% the previous month. The National Bureau of Statistics (NBS) reported that the headline inflation rate hit 33.95% in May, prompting the CBN to raise the interest rate to 26.25%.

The escalating inflation has plunged Nigerians into an economic crisis, with living costs soaring. A study by SBM Intelligence found that 27% of Nigerians, across various income levels, now rely on loan apps to manage their expenses amid record inflation. This surge in loan app usage highlights the severe impact of persistent inflationary pressures on the daily lives of Nigerians, particularly those with limited financial resources.