Marché Nouvelles

..Urges Stronger Real Sector Lending

By Gabriel Ewepu

ABUJA — The Centre for the Promotion of Private Enterprise (CPPE) has commended the Central Bank of Nigeria (CBN) over the successful implementation of its bank recapitalisation programme, revealing that 32 banks have met the new minimum capital requirements.

In a statement issued over the weekend, CPPE’s Executive Director, Muda Yusuf, described the exercise as orderly, non-disruptive, and confidence-boosting, noting that the process marked a significant milestone in strengthening the resilience and stability of Nigeria’s banking system.

According to him, the recapitalisation exercise recorded no cases of depositor losses, forced mergers, job cuts, or erosion of shareholder value—an outcome he said reflects improved regulatory oversight and stronger market discipline.

“This marks a significant improvement over past consolidation episodes and underscores the growing resilience within the banking system,” Yusuf stated.

Despite the progress, the CPPE raised concerns about the weak connection between the banking sector and the real economy, urging the CBN to prioritise policies that would enhance financial intermediation and support productive sectors.

The group noted that private sector credit in Nigeria remains relatively low at about 17 per cent of Gross Domestic Product (GDP) as of 2025, compared to higher averages across sub-Saharan Africa and other emerging economies.

It also highlighted challenges in access to credit, particularly for small and medium enterprises (SMEs) and consumers, warning that limited financing continues to constrain economic growth and domestic demand.

CPPE further pointed out that SME credit accounts for only about one per cent of total credit, despite the sector’s significant contribution to employment and economic output.

To address these gaps, the organisation called for targeted reforms, including measures to increase private sector lending, improve credit infrastructure, and incentivise long-term financing for key sectors of the economy.

It also urged policymakers to promote a more balanced allocation of credit and tackle structural issues limiting access to finance, particularly for businesses and households.

The group emphasised that while recapitalisation has strengthened banks’ capacity, the next phase of reform must focus on ensuring that this strength translates into tangible economic growth and development.