Nigerians are borrowing more money from financial institutions as households continue to deal with pressure on their finances.

Personal loans reached an estimated ₦2.06 trillion in May 2026, according to data contained in the Central Bank of Nigeria’s latest Economic Report.

The figure represents about 64.78 per cent of Nigeria’s total consumer credit of ₦3.18 trillion during the month.

The CBN data also showed that total consumer credit increased by 1.60 per cent from ₦3.13 trillion in April to ₦3.18 trillion in May.

Personal loans increased by 1.98 per cent during the month, while retail loans grew by 0.90 per cent.

On the surface, increased access to credit could appear positive.

But there is another question Nigerians should be asking:

Why are more people borrowing?

As for some households, borrowing can help finance a business, pay for education or acquire an asset that generates income.

But when borrowing increasingly becomes a way to pay for food, rent, transportation, healthcare and other basic expenses, it can point to deeper financial pressure.

A recent financial inclusion survey cited in the CBN report found that 40.8 per cent of formal borrowers used loans mainly for coping and consumption in 2026, compared with 31.7 per cent in 2023.

At the same time, borrowing for productive purposes fell from 40.2 per cent to 34.3 per cent.

Credit can help people build businesses and improve their financial position.

But borrowing simply to survive can create a cycle in which one loan is used to pay for today’s expenses while tomorrow’s income is already committed to repayment.

The survey also found that 45.8 per cent of formal-credit users reported some level of repayment stress, while 83.8 per cent experienced ongoing financial stress.

This does not mean every Nigerian taking a personal loan is in financial trouble.

Loans can be useful financial tools when the borrower understands the interest rate, repayment period, fees and consequences of default.

The problem begins when people borrow without a realistic plan for repayment.

For consumers, the lesson is straightforward.

Before taking a loan, calculate the total amount that will eventually be repaid rather than looking only at the amount being offered.

A ₦500,000 loan is not necessarily a ₦500,000 obligation.

Interest, fees and other charges can significantly increase the final amount.

Borrowers should also avoid taking a new loan simply to pay an existing loan unless they have carefully assessed whether the new arrangement genuinely reduces the financial burden.

The latest figures therefore tell two stories.

Nigeria’s financial system is providing more access to credit.

But the growing use of personal borrowing also raises questions about household purchasing power and financial resilience.

If more Nigerians are borrowing because they are investing, expanding businesses and building assets, that can be a sign of increasing financial inclusion.

If more Nigerians are borrowing simply to eat, pay rent or survive until the next salary, the numbers tell a much more uncomfortable story.

The real question is not just how much Nigerians are borrowing.

It is why they are borrowing.

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