Nigeria’s banking sector is facing a sharp rise in non-performing loans (NPLs) as a surge in household and corporate defaults hit a peak in the fourth quarter of 2025.
The Central Bank of Nigeria’s (CBN) disclosed this in its Credit Conditions Survey (CCS) Report for Q4 2025, which revealed that lenders experienced higher default rates on secured and unsecured household loans, as well as across all categories of corporate lending, including loans to small businesses, private non-financial corporations (PNFCs) and other financial corporations (OFCs).
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According to the survey, lenders reported higher default rates for secured, unsecured and all corporate lending types in Q4 2025.
According to latest industry data, the spike in delinquencies signals intensifying repayment pressures on consumers and businesses, raising fresh concerns over asset quality and credit stability in a tightening economic environment
The rise in defaults occurred despite improved access to credit during the quarter. Banks also indicated that credit availability increased for secured, unsecured and corporate loans, driven by changing economic outlook and lenders’ market share objectives.
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Demand for credit also strengthened, particularly for consumer loans, mortgages, overdrafts and corporate facilities for inventory financing and capital investment.
However, the expansion in lending was accompanied by heightened credit risk, as many borrowers struggled to meet repayment obligations.
On pricing conditions, the survey showed that spreads on secured and unsecured household loans widened relative to the Monetary Policy Rate (MPR) in Q4 2025, indicating tighter risk pricing by banks.
In contrast, lending spreads narrowed for corporate loans to small businesses, large PNFCs and OFCs, while spreads widened for medium-sized PNFCs, suggesting differentiated risk assessment across corporate segments.
