The Central Bank of Nigeria (CBN) has urged banks to ensure that the additional capital raised through the sector’s recapitalisation exercise translates into greater access to finance for businesses and households.
Muhammad Sani Abdullahi, CBN Deputy Governor, Corporate Services, made the call on Tuesday at the eighth seminar for financial correspondents and business editors in Abuja.
Abdullahi said the banking sector must use its stronger financial position to support productive areas of the economy, particularly 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 noted that small businesses and households also require reliable payment services and financial products that meet their specific needs.
According to him, stronger bank balance sheets should eventually result in wider access to credit and improved services, particularly for people in rural communities, women and young entrepreneurs.
Abdullahi also encouraged businesses seeking financing to strengthen their corporate transparency, governance and sustainability. He said better business practices would help banks assess credit risks and make informed lending decisions.
The deputy governor said the CBN would continue to prioritise areas including corporate governance, consumer protection, cybersecurity, data protection, reliable payment systems and business continuity.
He added that the apex bank’s supervisory framework would continue to focus on risk-based supervision, market surveillance and stronger stress-testing measures.
“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,” Abdullahi said.
He also urged financial correspondents and business editors to maintain accurate and objective reporting on developments within the financial sector, describing the media as an important link between policymakers, financial institutions, investors and the public.
Michael Akuka, Director of Corporate Communications and Investor Relations at the CBN, said the focus of the recapitalisation exercise had now shifted from raising capital to ensuring that the additional funds are effectively 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 help financial institutions withstand economic shocks, provide more support to productive activities and sustain public confidence in the banking system.
The CBN began the latest bank recapitalisation exercise in March 2024, requiring commercial, merchant and non-interest banks to meet new minimum capital requirements by March 31, 2026.
At the conclusion of the exercise, 33 banks had met the required capital thresholds, with a combined N4.65 trillion raised.
The CBN has said the recapitalisation is intended to strengthen the banking sector and improve its ability to support economic growth. (Central Bank of Nigeria)
