Banks record higher default rates on secured loans in Q3 2025 — CBN Survey

…Record Increase in Credit Availability

By Elizabeth Adegbesa

A new report by the Central Bank of Nigeria (CBN) shows that banks recorded increased default rates on secured loans in the third quarter of 2025 (Q3’25), even as credit availability rose across various lending categories.

The Credit Conditions Survey, released on Wednesday, indicated that default rates on unsecured loans, on the other hand, declined during the period under review.

According to the CBN, lenders attributed the increase in overall credit availability to improvements in the economic outlook for secured and corporate lending. For unsecured credit, the primary driver was a shift in lenders’ appetite for risk.

The report stated: “Lenders reported a decrease in default rates for unsecured lending while experiencing an increase in default rates for secured lending during the review quarter.”

For corporate lending, default rates fell across all categories, including small businesses, medium-sized Private Non-Financial Corporations (PNFCs), large PNFCs, and Other Financial Corporations (OFCs).

The CBN added that lenders reported increased credit availability in Q3 2025 for secured, unsecured, and corporate loans alike.

On loan approvals, the survey noted that approval rates rose across secured, unsecured, and corporate lending compared to the previous quarter.

The report further highlighted movements in lending rate spreads relative to the Monetary Policy Rate (MPR):

Spreads on secured and unsecured household lending widened by –0.1 and –1.8 index points, respectively.

For corporate lending, spreads narrowed for medium PNFCs and OFCs at 2.6 and 14.4 index points, respectively.

Spreads widened for small businesses and large PNFCs at –0.8 and –0.4 index points.

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