Nigerian banks are recording an increase in defaults even as demand for credit remains strong, the Central Bank of Nigeria said on Tuesday.
The CBN said in its latest financial stability assessment that higher borrowing by households and businesses has been accompanied by growing repayment challenges, reflecting the impact of inflation, elevated interest rates and pressure on corporate cash flows.
Despite the rising defaults, the central bank said banks remain resilient, noting that capital buffers and liquidity levels are largely adequate to absorb potential shocks. It added that lenders have continued to extend credit, particularly to the manufacturing, trade and services sectors.
The regulator cautioned banks to strengthen risk management practices and closely monitor asset quality to prevent a deterioration in the financial system.
Nigeria has seen sustained demand for loans in recent months as companies seek working capital and expansion funds amid economic reforms and tighter financial conditions.
