Nigerian banks eased lending conditions and increased credit approvals in the second quarter of 2026 as improved economic conditions, stronger liquidity and growing lender confidence boosted demand for corporate and secured loans, the Central Bank of Nigeria (CBN) has said.
The apex bank disclosed this in its Second Quarter 2026 Credit Conditions Survey, which showed that credit availability increased across major lending categories during the period.
According to the report, secured lending recorded the strongest expansion with an index score of 25.2 points, followed by corporate lending at 20.4 points, while unsecured lending rose to 10.5 points.
The CBN said demand for credit also strengthened, particularly among corporate borrowers and customers seeking secured facilities.
Demand for secured loans rose to 15.1 index points, while corporate loan demand increased to 15.2 points.
However, demand for unsecured loans remained weak at -1.2 index points, indicating that households were still cautious about borrowing through unsecured facilities despite improving economic conditions.
The survey also found that banks approved a higher proportion of loan applications during the quarter compared with the previous three months.
The increase in approvals reflected lenders’ growing willingness to extend credit as macroeconomic conditions continued to stabilise.
The CBN also reported a decline in loan default rates across several categories of borrowers during the review period.
It said default rates fell for secured and unsecured household loans as well as loans to small businesses, medium-sized private non-financial corporations (PNFCs), large PNFCs and other financial corporations (OFCs).
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The decline in defaults suggests an improvement in borrowers’ repayment capacity, which the report linked to better business conditions and stronger cash flows across key sectors.
The apex bank said virtually all borrower categories recorded stronger demand for loans during the quarter, except other financial corporations, where demand remained broadly unchanged.
It attributed the increase in secured lending to improving economic conditions, banks’ efforts to expand their market share and stronger liquidity positions within the financial system.
These factors, according to the CBN, encouraged banks to ease lending conditions while maintaining confidence in the quality of their loan portfolios as repayment performance improved.
The report further showed that lending costs moderated across most credit categories during the quarter as interest rate spreads narrowed relative to the Monetary Policy Rate (MPR).
The spread on unsecured household loans narrowed to 7.8 index points, suggesting a moderation in borrowing costs for consumers.
Similarly, corporate lending spreads narrowed to 14.0 index points for other financial corporations, 5.0 points for medium-sized private non-financial corporations and 4.7 points for large private non-financial corporations.
The CBN said the movement reflected more favourable financing conditions for businesses during the review period.
However, lending conditions remained relatively tight for small businesses, with the interest rate spread widening to -3.8 index points, indicating continued financing pressures for smaller firms compared with larger corporate borrowers.
The spread on secured household lending also widened by -4.5 index points relative to the MPR during the period.
The latest survey points to improving confidence in Nigeria’s banking sector, with lenders expanding credit to businesses and households amid stronger liquidity, increased loan approvals and declining default rates.
Sustained improvements in macroeconomic stability, easing inflationary pressures and stronger banking sector liquidity could further support credit growth in subsequent quarters, potentially boosting investment, business expansion and economic activity.
