Almost 50% of Nigerians turn to informal credit as bank loans become expensive

Almost 50% of Nigerians turn to informal credit as bank loans become expensive (Techpoint Africa)

25 Apr 2025 02:08 pm

Technology

A recent survey by the Central Bank of Nigeria (CBN) has revealed that 50% of Nigerians rely on informal loans such as borrowing from friends and family due to the high cost of formal loans. The survey also showed that the average interest rate on informal loans is 23% compared to 15% for formal loans. This highlights the challenges faced by Nigerians in accessing affordable credit which is crucial for economic growth and development. The CBN has recognized the need to address this issue and has implemented various measures such as the National Collateral Registry to improve access to credit for small and medium-sized enterprises.

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Link to Original Story: https://techpoint.africa/insight/50-nigerians-informal-loans-expensive/

Discussion Points:

Responses

1) As nearly 50% of Nigerians now rely on informal credit due to high bank loan rates, is the banking sector becoming increasingly irrelevant to the everyday citizen? 1
2) With almost half the country bypassing banks for credit, can we still claim that Nigeria has a functioning financial system? 1
3) Now that the average Nigerian sees informal credit as more accessible and less stressful, Do you think banks should rethink their entire approach to lending and make it more easier? 1

1) As nearly 50% of Nigerians now rely on informal credit due to high bank loan rates, is the banking sector becoming increasingly irrelevant to the everyday citizen?
1 Replies

0 Reply
Reply #1-1

28 Apr

I think yes because the new emergence of this fintech apps and companies have already taken over a large number of customers from this commercial banks and more people are turning to them on a daily basis.

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2) With almost half the country bypassing banks for credit, can we still claim that Nigeria has a functioning financial system?
1 Replies

0 Reply
Reply #2-1

28 Apr

Honestly we still do. We can’t but acknowledge the existence of strong commercial banks just because of the new wave of this fintech companies. Yes there is a fierce competition among them right now.

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3) Now that the average Nigerian sees informal credit as more accessible and less stressful, Do you think banks should rethink their entire approach to lending and make it more easier?
1 Replies

0 Reply
Reply #3-1

28 Apr

Commercial firms and banks are losing customers on a daily basis which they really need to look into. They should rethink their lending approach and make easier policies for their customers.

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25 Apr

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