Gross consumer lending is expected to register growth in 2023, but with inflation continuing to be very high, it will not go far in terms of consumer spending. A new government has implemented some difficult decisions in order to stabilise the economy, including ending a decades-old petrol subsidy that has seen prices triple and has also ended restrictions on foreign exchange, which has significantly weakened the naira.
The digital space, with its enhanced data and analytics, is simplifying and speeding up lending decisions and fintechs are particularly adept at this and emerging as significant competitors to mainstream banks. In addition, the use of technology is enabling more people to be able to access consumer credit, with players giving out micro loans for as little NGN10,000 and as high as NGN500,000.
While the mortgage is still underdeveloped and home ownership rates are very low, some banks have registered growth. First Bank mortgage loans grew from NGN43 billion in 2021 to NGN50 billion naira in 2022, whilst Access Bank’s portfolio grew NGN3 billion naira in 2021 to NGN6 billion in 2022.
Buy Now Pay Later is gaining traction in Nigeria and is expected to register significant growth in 2023, though total gross lending is still low. It is being driven by fintechs such as EasyBuy and Carbon Zero.
There are potential headwinds that could dampen growth in consumer lending over the forecast period, not least rising inflation and interest rates. As long as these trends continue, it will have a dampening effect.
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Understand the latest market trends and future growth opportunities for the Consumer Lending industry in Nigeria with research from Euromonitor International's team of in-country analysts – experts by industry and geographic specialisation.
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Consumer Lending
Aggregate of Consumer Credit and Mortgages/Housing. Gross Lending: The total value of loans advanced by institutions in a given year; data refers to single year only. Outstanding Balance: The collective amount owed by borrowers at the end of a given year; data refers to the cumulative impact of debt.
See All of Our DefinitionsThis report originates from Passport, our Consumer Lending research and analysis database.
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