A recent SBM Intelligence study indicates that 27% of Nigerians, spanning various income groups, are turning to loan apps to cope with their expenses, particularly in light of record inflation.
27% of Nigerians Currently Utilize Loan Apps to Manage Their Expenses
This trend has seen a rise in online banks providing credit services, with a primary focus on individuals in the low-income category. Currently, there are approximately 161 loan apps that have received full approval from Nigerian regulatory authorities to operate.
Despite reports of unethical practices by these loan apps, Nigerians’ demand for credit facilities from these digital lenders remains strong.
Spending On Food
While the primary focus of the study was to assess the recent food spending of Nigerians across various income groups, it also delved into how Nigerians are adjusting to the recent rise in living costs.
The study reveals that 49% of Nigerians earning the minimum wage of N30,000 or less allocate their entire income to food expenses.
As per the study, 47% of Nigerians earning between N31,000 and N50,000 are said to allocate their entire income to food expenses, while those in the N51,000 to N80,000 income range spend more than 60% of their income on food.
Inflation in Food Prices in Nigeria
The report reveals how Nigerians are coping with the significant inflation driven by soaring food prices.
According to the most recent inflation report from the National Bureau of Statistics, Nigeria’s inflation rate is at 26.72%, with food inflation reaching 30.64%.
Nigeria has been facing persistent monthly inflation for the ninth consecutive month, reaching the highest level in nearly two decades.
This is attributed to the recent removal of fuel subsidies and the instability in the foreign exchange market.
The federal government has taken action by declaring a state of emergency on food security in the country. Additionally, they have approved a N35,000 wage award for six months to provide support to Nigerians during these challenging times.