CBN: Banks’ Stronger Capital Base Must Expand Access to Finance
By Nafiu Muhammad Lema
The Central Bank of Nigeria (CBN) has said the success of the banking sector recapitalisation programme should be reflected in increased financing for businesses, households and other productive activities across the economy.
Muhammad Sani Abdullahi, CBN Deputy Governor, Corporate Services, stated this on Tuesday at the eighth Seminar for Financial Correspondents and Business Editors in Abuja.
Abdullahi said banks must deploy the additional capital raised through the recapitalisation exercise to support key sectors such as agriculture, manufacturing, services and infrastructure.
“The wider economy should see the benefit over time. Agriculture, manufacturing, services, and infrastructure need finance suited to their cash flow and investment varieties,” he said.
He also stressed the need for smaller businesses and households to have access to reliable payment systems and financial products that meet their specific needs.
According to him, stronger bank balance sheets should result in improved access to credit and better financial services, particularly for rural communities, women and young entrepreneurs.
The deputy governor further urged businesses to strengthen their corporate governance, transparency and sustainability practices to help banks properly assess lending risks.
He said the CBN would continue to prioritise sound governance, consumer protection, cybersecurity, data protection, dependable payment systems and business continuity within the financial sector.
Abdullahi added that the apex bank’s supervisory framework would focus on risk-based supervision, market surveillance and stronger stress-testing mechanisms.
“Consumer protection and financial inclusion are integral to resilience. A system that people can access, understand, and trust is better able to support inclusive growth,” he said.
He also urged financial correspondents and business editors to maintain accurate and objective reporting on developments in the financial sector, describing the media as a key link between policymakers, financial institutions, investors and the public.
Michael Akuka, Director of Corporate Communications and Investor Relations at the CBN, said attention had now shifted from banks’ ability to raise capital to how effectively the additional funds would be deployed.
“The question has changed. It is no longer whether the banking sector can raise capital, but what a better supervised banking sector does with the additional capital,” Akuka said.
He said stronger bank balance sheets should improve the sector’s ability to withstand economic shocks, finance productive activities and sustain public confidence.
The CBN commenced the banking sector recapitalisation exercise in March 2024, requiring commercial, merchant and non-interest banks to increase their minimum capital levels by March 31, 2026.
At the conclusion of the exercise, 33 banks had met the new minimum capital requirements, collectively raising N4.65 trillion.
