Banks in Nigeria recorded increased default rates on secured loans in the third quarter of 2025 (Q3’25), even as overall credit availability improved across multiple lending categories, according to a new report by the Central Bank of Nigeria (CBN).
The Credit Conditions Survey, released on Wednesday, indicated that while defaults on secured loans rose, default rates for unsecured loans declined during the same period. Lenders attributed the growth in credit availability to improved economic conditions for secured and corporate lending, while increased risk appetite drove unsecured credit expansion.
The report noted: “Lenders reported a decrease in default rates for unsecured lending while experiencing an increase in default rates for secured lending during the review quarter.”
Corporate lending fared better, with default rates falling across all segments, including small businesses, medium-sized Private Non-Financial Corporations (PNFCs), large PNFCs, and Other Financial Corporations (OFCs).
Loan approval rates also increased across secured, unsecured, and corporate lending, reflecting a broader improvement in access to credit.
The survey highlighted changes in lending rate spreads relative to the Monetary Policy Rate (MPR):
The CBN survey sgnal a mixed performance in the lending landscape, with banks navigating rising defaults in secured loans while maintaining cautious optimism through expanded credit for corporate and unsecured borrowers.
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