CBN Reports Higher Bank Lending, Lower Loan Defaults

Nigerian banks expanded the supply of bank lending across secured, unsecured and corporate loans during the second quarter of 2026, while loan default rates declined across all major lending categories, according to the latest Credit Conditions Survey released by the Central Bank of Nigeria (CBN).

The CBN explained that the survey is based on weighted responses from lenders, giving greater importance to banks that reported larger changes and institutions with bigger shares of the credit market. The findings were measured using net percentage balances, which compare lenders reporting increased demand with those reporting lower demand.

According to the report, banks increased the availability of secured loans, unsecured loans and corporate lending, while demand also rose for secured and corporate credit. Demand for unsecured loans, however, recorded a slight decline.

The apex bank attributed the growth in bank lending to a more favourable economic outlook, improved liquidity conditions and banks’ efforts to expand their market share. Increased funding availability also supported unsecured lending, while tighter wholesale funding conditions, improving economic prospects and changing sector-specific risks encouraged greater corporate lending.

The survey showed that demand for corporate loans was largely driven by balance sheet restructuring, capital investment and inventory financing, reflecting increased business activity during the review period.

The report also revealed that the spread between unsecured lending rates and the Monetary Policy Rate (MPR) narrowed, while the spread for secured loans widened slightly. For corporate credit, lending spreads narrowed for Other Financial Corporations, medium-sized and large private companies, although they widened for small businesses.

Encouragingly, the CBN reported lower loan default rates across secured, unsecured and corporate lending. Defaults also declined among small businesses, medium and large private companies, as well as other financial institutions, indicating improving credit quality within Nigeria’s banking sector.

Do you think easier access to bank lending will help businesses expand and strengthen Nigeria’s economy?