Nigerians use formal credit for rent, medical bills and school fees as consumption borrowing rises sharply, survey finds.
A new survey has found that Nigerians are increasingly turning to formal credit to meet everyday consumption and cope with financial pressures, rather than to expand businesses or build productive capacity.
The 2026 Access to Financial Services in Nigeria (A2F) Survey by Enhancing Financial Inclusion and Advancement (EFInA) showed that the proportion of formal borrowers taking loans for coping and consumption purposes jumped from 31.7 per cent in 2023 to 40.8 per cent in 2026, an increase of 9.1 percentage points.
According to the survey, over the same period, borrowing for productive enterprises fell from 40.2 per cent to 34.3 per cent, while loans for household assets declined from 25.2 per cent to 23.4 per cent.
The survey therefore found that the largest share of formal credit is now going towards helping households cope with immediate financial demands rather than financing activities capable of generating additional income.
However, the finding comes against the backdrop of a sharp expansion in access to formal financial services. Formal financial inclusion rose from 64 per cent of adults in 2023 to 73 per cent in 2026, equivalent to about 87.2 million adults.
Also, formal credit increased from 6 per cent to 10 per cent, with about 11.9 million adults currently borrowing from regulated financial institutions.
EFInA’s findings suggested that having access to formal financial services does not necessarily mean households are financially secure. Only about 25 per cent of Nigerian adults are classified as financially healthy, despite 79 per cent being financially included.
Among adults with formal credit, the financial pressures were particularly pronounced, with the survey finding that 45.8 per cent of formal-credit users reported some or serious repayment stress.
In the same vein, up to 83.8 per cent experienced ongoing financial or welfare stress, the highest level recorded among the groups examined. The survey also showed that formal access itself has done little to eliminate financial distress.
It stated that about 70.1 per cent of formally included adults experience ongoing financial or welfare distress, compared with 71.9 per cent among those not formally included.
The consumer-credit data showed that the leading reasons for borrowing were rent and housing, medical bills and school fees, reinforcing the A2F finding that an increasing proportion of formal credit is being used for coping and consumption rather than productive investment.
The situation, according to the data, is compounded by the limited ability of households to mobilise emergency funds as only 10.6 per cent of formally included adults could raise N156,000 within seven days without difficulty, compared with just 3.7 per cent of adults who were not formally included.
The survey found that 56.8 per cent of banked adults with known buffer duration could not cover more than one month of expenses, suggesting that having a bank account does not necessarily translate into a meaningful financial cushion.
Also, formal borrowing among informally employed Nigerians increased from 5 per cent in 2023 to 15 per cent in 2026, while borrowing among business owners rose from 4 per cent to 10 per cent and among farmers from 2 per cent to 6 per cent.
Among young adults aged 18 to 35, formal credit increased from 4 per cent to 10 per cent, while the proportion among those aged 35 and above rose from 8 per cent to 10 per cent. Rural formal borrowing also more than doubled from 3 per cent to 7 per cent, although it remained below the 13 per cent recorded among urban residents.
The survey’s findings also indicated that the growing dependence on credit is occurring within an economy where households have limited protection against shocks. Only 5.2 per cent of adults, or about 6.2 million people, had formal insurance, leaving about 81 million formally included adults uninsured.
According to the organisation, financial inclusion risks becoming “participation without progress” if access to financial products does not translate into greater resilience. It noted that coping and consumption credit had risen by 9.1 percentage points while productive borrowing had fallen by 5.9 percentage points between 2023 and 2026.
The survey, which covered 18,679 adults across all 36 states and the Federal Capital Territory (FCT), was conducted between April and June 2026 under the supervision of the National Bureau of Statistics (NBS), with the results weighted to represent Nigeria’s adult population.