Your Savings Fund Billion-Naira Corporate Loans, And You Get Almost Nothing Back

Every time a Nigerian walks into a bank and deposits money, that money does not sit idle. Banks use customer deposits as the primary raw material for their lending operations.

The deposits collected from millions of individuals, market traders, salary earners, and small business owners are pooled together and redistributed as loans. This is the foundational mechanics of commercial banking. What is worth examining is who, exactly, receives those loans once they leave the counter.

In 2025, four of Nigeria's largest banks held a combined ₦89.94 trillion in customer deposits. The institutions in question are Access Holdings, Guaranty Trust Holding Company (GTCO), United Bank for Africa (UBA), and First HoldCo.

Together, they represent a significant portion of the country's formal banking infrastructure. An analysis of their 2025 annual reports reveals that for every ₦1 these banks lent to individual retail customers, they lent approximately ₦10.3 to corporate borrowers.

The four banks disbursed ₦3.47 trillion to retail customers in total and ₦29.60 trillion to businesses.

The ratio is not uniform across all four institutions, but the direction of the imbalance is consistent. GTCO showed the narrowest gap, lending roughly ₦5 to corporate clients for every ₦1 extended to individual borrowers.

Access Holdings' figure was more than ₦6 to businesses for every ₦1 to consumers. At UBA, the ratio climbed to nearly ₦11 to ₦1. First Bank recorded the most pronounced disparity of all four: close to ₦18 in corporate lending for every ₦1 directed at individual customers.

Across institutions and across ownership structures, the story is the same. Corporate Nigeria receives the credit. Everyone else makes do.

Who Is Actually Funding These Loans

The starting point for understanding why this matters is the deposit side of the equation, not the lending side. Banks do not generate credit from thin air. They lend out money that customers have placed with them, at a margin.

This means the people who supply the deposits are, in an indirect but real sense, the source of the capital that gets extended as loans.

At GTCO, retail customers supplied ₦5.92 trillion of the bank's ₦12.55 trillion in total deposits. That is close to 47% of the deposit base coming from individual account holders.

At UBA, individual customers contributed ₦9.77 trillion out of a total deposit pool of ₦23.94 trillion, representing roughly 41% of the bank's funding. Access Holdings collected ₦9.87 trillion from retail customers, which accounted for 28% of its total deposit base of ₦34.56 trillion.

These are not marginal figures. Retail customers are a meaningful source of the liquidity that banks rely on to conduct business. The inversion becomes clear when you set deposit contribution beside credit allocation.

UBA's retail customers supplied 41% of total deposits and received 8.4% of total credit disbursed. Access Holdings' retail customers funded 28% of deposits and collected 13.7% of loans.

At First Bank, retail borrowers received just 5.3% of the total loan book, and that fraction actually declined from the previous year, falling from ₦502.9 billion in 2024 to ₦487.9 billion in 2025.

Why Banks Prefer Corporate Borrowers

The preference for corporate lending is not a secret, and it is not irrational from a purely commercial standpoint. Banks operate within a profit motive, and large corporate loans make financial sense in ways that consumer lending does not, at least not at the scale Nigerian retail borrowers would require.

A corporate borrower such as a manufacturing conglomerate, a major telecoms operator, or an oil services company typically comes to the bank with several things that individual borrowers cannot offer. They have audited financial statements going back multiple years.

They have existing relationships with the bank, often across multiple product lines. They have physical and financial assets that can serve as collateral. Their cash flows, while not immune to macroeconomic pressure, are more predictable than the earnings of an informal trader or a salaried worker whose employer may restructure at any time.

From an operational standpoint, a single facility of ₦5 billion extended to one company is far cheaper to administer than five thousand loans of ₦1 million each extended to individual customers. The due diligence is consolidated, the documentation requirements are clearer, and the monitoring is simpler.

Consumer lending, by contrast, requires banks to evaluate thousands of applications from people with inconsistent income documentation, no formal credit histories, and limited collateral. In a country where informal employment is as widespread as it is in Nigeria, building a profitable retail credit business is genuinely difficult.

That said, corporate lending is not without its own risks, and 2025 made this clear. The Central Bank of Nigeria reported in June 1st, 2026 that the banking sector's non-performing loan ratio had risen to 8.03%, a figure that exceeds the regulatory prudential threshold of 5%.

A non-performing loan is a loan where the borrower has stopped making payments, typically for 90 days or longer, and the bank must set aside provisions to cover potential losses.

Data from the International Monetary Fund shows that Nigeria's non-performing loan ratio stood at 4% in 2022. By the third quarter of 2025, it had reached 8%.

High interest rates, foreign exchange volatility, and inflation have placed pressure on corporate borrowers who took on naira-denominated debt at a time when the economic environment has since become significantly more hostile.

The Gap That Built an Entire Industry

Nigeria has more than 230 million people and is the third-largest economy on the African continent. Its consumer credit market, however, is a fraction of what those numbers might suggest.

As of January 2026, the Central Bank of Nigeria recorded total consumer credit at ₦3.81 trillion, equivalent to approximately $2.78 billion. Personal loans accounted for just over half of that amount.

To put this in context: Kenya, a country with roughly one-quarter of Nigeria's population, had consumer credit of 479.6 billion Kenyan shillings as of December 2025, equivalent to approximately $3.71 billion.

Kenya's smaller economy is extending more credit to individual consumers in absolute dollar terms than Nigeria is. The gap is not explained by income levels alone. It reflects a structural problem with how formal financial institutions have historically approached retail credit on this side of the continent.

Only around 6% of Nigerian adults borrow from formal financial sources, according to data from Enhancing Financial Innovation and Inclusion (EFInA). This figure is notable because it coexists with a financial inclusion rate of over 64%. In other words, most Nigerians have bank accounts. They are part of the formal financial system. They are just not receiving credit from it.

This is the gap that Nigeria's digital lending industry was built to fill. Since 2022, the Federal Competition and Consumer Protection Commission has approved 505 digital lenders to operate in the country.

The consumer credit market is currently estimated at $2.1 billion and continues to grow as economic hardship pushes more households toward short-term borrowing. FairMoney Microfinance Bank disbursed over ₦150 billion in loans during 2025. Sycamore, a smaller platform, disbursed close to ₦20 billion in the same period.

Digital lenders have expanded access by building credit assessment models that do not depend on formal documentation or traditional collateral. Many use alternative data sources such as transaction history, airtime purchase patterns, and utility payment records to estimate a borrower's creditworthiness.

Lending software company Lendsqr is currently testing AI models that analyse a borrower's voice and facial characteristics as part of its credit assessment process. The approach is experimental, but it reflects how far outside conventional lending infrastructure these platforms are willing to operate in order to serve customers that banks will not.

The cost of this access, however, falls on the borrower. Digital lenders charge significantly higher interest rates than traditional banks, partly because their borrower base is riskier and partly because operating costs per loan are high when ticket sizes are small.

Are Banks Finally Paying Attention?

There are early signs that some of the country's largest banks recognise how much retail credit opportunity they have left on the table. GTCO now offers instant digital loans to individual customers, with monthly interest rates beginning at 2.95%.

Access Holdings has developed a product called Oxygen, positioned as a digital credit solution for the consumers who have typically had to rely on fintech platforms for fast access to funds.

These are meaningful moves, but they remain small relative to the size of the banks' overall loan books. S&P Global Ratings projects lending growth in Nigeria at around 25% in nominal terms for 2026, but the agency expects oil and gas, agriculture, and manufacturing to drive the bulk of that expansion.

Retail lending will contribute marginally to banks' overall portfolio growth, the agency noted, and elevated inflation and interest rates will continue to suppress asset quality.

For the foreseeable future, Nigeria's banking system is structured to serve its corporate clients first. The millions of Nigerians who fund a significant share of these banks' deposit bases, and by extension their lending capacity, will continue to look elsewhere for credit.

They will find it, at higher cost, from platforms that did not exist a decade ago and that have built an entire industry on a need that traditional banking chose not to meet.