Rent is Driving More Nigerians to Borrow as Housing Costs Rise, New Report Shows

Mary Nnah

For many Nigerians, loans are no longer mainly for growing a business or making major purchases. Increasingly, they’re used to cover everyday necessities, from rent to medical bills and school fees.

That’s one of the key findings from Credit Direct’s 2025 Nigeria’s Credit Landscape Report, which examined borrowing patterns among 300,000 active borrowers across different income levels and occupations. While the report highlights several essential expenses that push people to seek credit, rent stands out as a growing concern as housing costs continue to rise across the country.

The report drew insights from salaried workers, self-employed individuals, small business owners, and people working in the informal sector. Overall, it paints a picture of a country where borrowing has become an important tool for managing day-to-day financial pressures.

About 90% of borrowers earn less than ₦200,000 a month, with the largest group, at 36%, earning between ₦50,000 and ₦99,999. And only 2% of borrowers make more than ₦400,000 monthly.

In other words, the typical Nigerian taking a loan today is not necessarily looking to expand a business or finance a major project. More often, they’re trying to bridge the gap between their income and the cost of essential living expenses.

The pressure is particularly severe among the lowest earners. According to the report, around 22% of borrowers earn less than ₦50,000 a month. Some in this category take loans worth up to half, and in some cases nearly twice their annual income.

While borrowing can help families meet urgent needs, the report notes that repayment could become increasingly difficult if incomes do not improve. Furthermore, the report places an emphasis on the rising cost of necessities and the financial burden many households face in paying for housing, healthcare, and education.

Housing, in particular, presents a unique challenge in Nigeria. In many parts of the country, tenants are still expected to pay one or even two years’ rent upfront. For workers who earn monthly salaries, coming up with such large amounts at once can be overwhelming.

As a result, some Nigerians are turning to loans to secure accommodation or meet rent obligations. For many tenants, the challenge doesn’t end there. Reports of sharp rent increases have become common, especially in major cities. Some renters say their rent doubled when it was time to renew their rent, while others have had to move farther from city centres, switch neighbourhoods, or return to live with relatives because they could no longer afford where they lived.

In conclusion, the report’s findings suggest a shift in the role credit plays in everyday life. Rather than funding investments or helping people build wealth, loans are increasingly being used to cover essential expenses and keep households afloat. And with inflation continuing to erode purchasing power while salary growth remains slow, that trend may not be changing anytime soon.

The full Nigeria Credit Landscape Report 2025, which contains detailed insights into borrower behaviour, repayment trends, and developments across the finance sector, is available for download from Credit Direct: https://www.creditdirect.ng/2025-credit-report

About Credit Direct

Credit Direct is building Africa’s leading embedded finance business by integrating credit into the supply chains and payment flows of partners, unlocking financial success for individuals and businesses. The company also provides retail investment solutions, expanding its role from access to credit to broader financial growth and wealth-building. Credit Direct has served millions of customers nationwide, including those historically underserved by traditional banking. Credit Direct is a wholly owned subsidiary of First City Monument Bank (FCMB) Group Plc.