Nigeria’s credit market nears 10,000 in Q1

Nigeria recorded an average of 9,611 debtors in the first quarter of 2026, but the figure was still 88.5 per cent lower than the average recorded in the fourth quarter of 2025, raising concerns among analysts about a widening gap between credit growth and access to financing for business expansion and investment, writes ARINZE NWAFOR

Nigeria’s registered debtors rose 52.2 per cent year-on-year to an average of 9,611 in the first quarter of 2026, signalling stronger credit activity. Concurrently, the debtor size plunged 88.5 per cent from the record 83,370 quarterly average reached in the final quarter of 2025.

Data from the Central Bank of Nigeria’s Quarterly Statistics, sourced from the National Collateral Registry, showed that registered debtors increased from an average of 6,313 in Q1 2025 to 9,611 in Q1 2026.

The sharp year-on-year improvement was driven largely by individuals and businesses, with the total number of registered debtors rising from 7,143 in January to 9,786 in February and 11,904 in March 2026.

Notably, the Q1 figure represented a steep reversal from the extraordinary surge recorded in Q4 2025, when monthly registrations climbed from 74,311 in October to 83,860 in November and 91,939 in December.

Breakdown

Individuals accounted for the largest share of debtors in the first three months of 2025 and 2026. Individual debtors averaged 8,409 in Q1 2026, up 54.1 per cent from the Q1 2025 average of 5,458.

The number of individual debtors increased from 6,190 in January 2026 to 8,499 in February and 10,539 in March.

The March figure was 77.1 per cent higher than the 5,950 individuals recorded in March 2025.

However, the Q1 2026 average was 88 per cent below the 69,993 individual debtors recorded on average in Q4 2025. Individual debtors peaked at 77,053 in December 2025, before falling sharply in the first quarter.

Businesses also recorded increases compared with Q1 2025, although the numbers remained considerably below the levels recorded in the final quarter of 2025.

Large-business debtors rose from 231 in January to 455 in February and 476 in March 2026, giving a quarterly average of 387, compared with 104 in Q1 2025. This represents a 272 per cent increase.

Medium-business debtors averaged about 594 in Q1 2026, compared with 467 in Q1 2025, an increase of 27.2 per cent.

Small-business debtors averaged 174 in Q1 2026, compared with 252 in Q1 2025, representing a decline of 31 per cent.

Micro-business debtors averaged about 47 in Q1 2026, against 33 in Q1 2025, an increase of 42.4 per cent.

Despite the year-on-year improvement, the business debtor figures remained far below the levels recorded during the Q4 2025 peak.

The number of large-business debtors, for instance, averaged 3,051 in Q4 2025, compared with 387 in Q1 2026, a decline of 87.3 per cent.

Medium-business debtors averaged about 6,590 in Q4 2025, against 594 in Q1 2026, representing a decline of 91 per cent.

Small-business debtors fell from a Q4 2025 average of 2,730 to 174 in Q1 2026, a 93.6 per cent decline, while micro-business debtors dropped from an average of 529 to 47, representing a 91.1 per cent fall.

The number of creditors followed a similar pattern. Creditors averaged 9,611 in Q1 2026, compared with 6,313 in Q1 2025, representing a 52.2 per cent increase.

Deposit Money Banks increased from 88 creditors in January 2025 to 108 in March 2025, while the corresponding figure rose from 144 in January 2026 to 1,943 in March.

Microfinance banks remained the dominant category, rising from 5,066 in January 2025 to 6,542 in March, compared with 6,471 in January 2026 and 9,297 in March.

Non-bank financial institutions also increased to 449 in March 2026 from 137 a year earlier.

However, the Q1 2026 creditor average was only a fraction of the Q4 2025 level. Creditors averaged 83,370 in the final quarter of 2025, meaning Q1 2026 recorded an 88.5 per cent decline.

The figures suggest that access to credit through the collateral financing system improved substantially compared with the first quarter of 2025 but fell sharply from the unusually high level recorded in the final quarter of last year.

Expert analysis

The Nigerian Economic Summit Group, in its H1 2026 Outlook on the economy, said monetary easing had supported stronger credit expansion but warned that the distribution of lending remained a concern.

“Credit to the private sector grew 24.0 per cent in February 2026, then moderated to 6.9 per cent by the end of H1-2026, but remained above the 4.0 per cent expansion recorded in H1-2025,” NESG stated.

The group said services continued to dominate bank lending, accounting for 58.4 per cent of total bank credit in H1 2026, compared with 55.7 per cent in H1 2025.

It said oil and gas accounted for 27.8 per cent of bank credit, while non-oil industrial sectors received 6.7 per cent and agriculture 7.1 per cent.

Within the productive sectors, manufacturing received 8.3 per cent, construction 4.6 per cent and real estate 1.6 per cent.

“This concentration of bank credit suggests that the expansion in lending is not being matched by broad-based access to finance for investment and expansion, particularly in sectors with strong employment and productivity potential,” the group stated.

The Centre for the Promotion of Private Enterprise also warned that high interest rates continued to restrict private-sector investment and access to credit.

The Chief Executive Officer of the CPPE, Dr Muda Yusuf, said, “High interest rates continued to constrain private-sector investment and access to credit, while elevated energy costs, inadequate electricity supply, logistics inefficiencies and weak transport infrastructure sustained a high-cost operating environment.”

Yusuf said manufacturing, agriculture and MSMEs continued to face competitiveness challenges despite improvements in macroeconomic stability.

The CPPE boss said the economy remained on a gradual recovery path but required deeper structural reforms to translate macroeconomic stability into stronger real-sector performance and improved household welfare.

The increase in Q1 2026 debtor registrations also coincided with stronger bank lending to the trade sector. Deposit Money Banks’ credit to trade rose from N4.67tn in January to N5.54tn in February and N6.29tn in March, representing a 34.6 per cent increase over the quarter.

The CBN reduced the Monetary Policy Rate by 50 basis points to 26.5 per cent in February 2026 as part of measures to support economic activity, according to the NESG.

The Q1 figures therefore point to improved credit activity compared with a year earlier, but the sharp reversal from the Q4 2025 peak and the concentration of lending outside several productive sectors highlight the continuing challenge of converting credit expansion into broad-based business investment, job creation and productivity growth.

The CBN stated that registration of financing statements on the National Collateral Registry commenced in November 2016.