By Jemimah Wellington, JKNewsMedia Reporter
NIGERIA’s BORROWING landscape has revealed a dominant reliance on microfinance banks (MFBs), despite a noticeable drop in borrower numbers.
Recent data from the Central Bank of Nigeria (CBN) shows that 95.66% of all bank debtors as of September 2024 were tied to MFBs, cementing their critical role in the country’s credit ecosystem.
Out of 6,537 total debtors across all financial institutions, 6,253 borrowed from MFBs.
This marks a slight drop from the 6,573 recorded in August 2024, and a sharper 26.4% year-on-year decline from 8,500 in September 2023.
While the sector has faced reductions in borrowers, MFBs remain the leading lenders, supporting the financial needs of individuals and small businesses, the report notes.
Also, the data comes as the CBN, under Governor Olayemi Cardoso, implements measures to tackle inflation, which soared to 34.80% in December 2024.
Moreover, interest rate hikes introduced to curb inflationary pressures have likely contributed to the decline in overall borrowing across various institutions.
Traditional Deposit Money Banks (DMBs), however, have experienced a sharper contraction.
The report notes that debtor numbers within DMBs dropped dramatically by 69%, from 498 in September 2023 to just 155 in September 2024 as other creditor categories displayed mixed trends.
Finance houses witnessed significant growth, with a 195% year-on-year increase in borrowers, while non-bank financial institutions saw a 32% uptick in debtor numbers.
It also says that digital loan apps have increasingly influenced borrowing patterns, offering fast, collateral-free loans to a growing audience.
Despite criticisms of high-interest rates and aggressive recovery methods, these platforms continue to challenge MFBs and traditional banks, reshaping the lending space.
Overall, the value of loans across all debtor types reached N118.73bn in September 2024, reflecting a 4.2% year-on-year increase but a 12.8% decline compared to August 2024.
Individual borrowers are also noted to have accounted for N22.2bn of the total, showing a notable year-on-year rise but a significant drop from the previous month.
