The Chartered Institute of Bankers of Nigeria (CIBN) has called on recapitalised banks to expand access to affordable, long-term financing for small businesses as Nigeria seeks to translate N4.65 trillion in fresh bank capital into industrial growth, job creation and economic transformation.
The Institute said the success of the banking sector’s recapitalisation exercise would depend on how effectively lenders deploy their stronger capital base to support manufacturing, agriculture, infrastructure and small and medium-sized enterprises (SMEs), rather than focusing mainly on balance sheet growth.
Dele Alabi, president and chairman of council of the CIBN, made the call at the Institute’s 2026 Fellowship Investiture Ceremony in Lagos on Saturday, where he said Nigeria had reached a critical stage in its financial sector reforms.
Following the completion of the recapitalisation programme in March 2026, the banking sector mobilised N4.65 trillion in fresh capital, with 33 banks meeting the new minimum capital requirements.
‘The question before us is no longer whether our banks have sufficient capital, but whether that capital will translate into new industries, expanded businesses, better infrastructure, thriving SMEs, sustainable jobs, and shared prosperity,’ Alabi said.
He said Nigeria had an opportunity to deploy the enhanced capital towards manufacturing, agriculture, infrastructure, energy, technology and other productive sectors.
The call comes amid concerns about the allocation of bank credit, particularly to manufacturing, where lending declined by 33.8 percent from N8.53 trillion in December 2024 to N5.65 trillion in August 2026, according to a presentation by Tayo Aduloju, chief executive officer of the Nigerian Economic Summit Group (NESG), at the same event.
Manufacturing’s share of total bank credit also fell from 17.4 percent in December 2023 to 8.7 percent in August 2026, while average credit to trade and commerce increased by 49 percent year-on-year to N5.9 trillion between January and August 2026.
The figures highlight the challenge facing policymakers and lenders as they seek to ensure that stronger bank balance sheets translate into productive investment and wider access to finance for businesses.
Aduloju said the recapitalisation exercise had strengthened banks’ lending capacity, but high borrowing costs, liquidity constraints, credit risks and the mismatch between short-term deposits and long-term industrial projects continued to limit financing for productive sectors.
Although the Central Bank of Nigeria reduced its monetary policy rate to 23 percent in September 2026, bank lending rates remained between 19 percent and 32.6 percent, according to the NESG presentation.
Government borrowing also continued to compete with private businesses for available funds. Credit to the government increased by 63 percent year-on-year to N39.4 trillion in September 2026, compared with 16 percent growth in private-sector credit to N83.9 trillion.
Aduloju argued that Nigeria’s industrial financing challenge was not simply a shortage of capital, but the fragmented way existing financial institutions mobilise and deploy funds.
He proposed a more coordinated financing framework involving commercial banks, pension funds, insurance companies, development finance institutions and credit guarantee institutions to expand access to long-term capital and reduce lending risks.
The NESG also recommended credit guarantees, interest rebates and tax incentives to encourage lending to productive sectors, alongside improved access to financing for businesses that lack conventional collateral.
Speaking at the event, Babajide Sanwo-Olu, governor of Lagos State, similarly urged recapitalised banks to develop more accessible credit products for smaller businesses, support industrial clusters, finance equipment acquisition and strengthen supply chains linking small enterprises to larger markets.
He said government intervention alone could not meet the financing needs of Nigeria’s growing business community, stressing the need for stronger collaboration between government, financial institutions and private investors.
Sanwo-Olu pointed to opportunities around the Lekki Deep Sea Port, industrial activities along the Lekki corridor, infrastructure investments and the Lagos State Electricity Law as areas where stronger bank participation could unlock private investment, improve productivity and create jobs.
He also highlighted the role of the Lagos State Employment Trust Fund in supporting entrepreneurs through access to finance, enterprise development and capacity building.
Alabi said the CIBN would continue to promote practical solutions to the financing challenges facing smaller businesses. The Institute is scheduled to host its CIBN MSME Forum on December 1, 2026, to advance discussions on expanding access to finance and accelerating enterprise growth.
The Institute is also advocating the establishment of SME hubs across Nigeria to provide entrepreneurs with financing, business support services, capacity development, digital tools and market opportunities.
Beyond access to credit, the NESG identified reliable electricity, logistics, port infrastructure and access to foreign exchange for machinery and industrial inputs as essential conditions for industrial expansion.
The presentation noted that the national grid delivered an average of 4,113 megawatts in the first quarter of 2026, compared with installed capacity of 13,625 megawatts.
Nigeria’s industrial policy targets include increasing manufacturing’s share of gross domestic product to 15 percent by 2030 and 25 percent by 2035.
The CIBN said the banking profession must support these ambitions through responsible lending, sound corporate governance and stronger professional competence.
For the Institute, the next phase of recapitalisation must move beyond stronger balance sheets to financing businesses, expanding productive capacity and creating sustainable employment opportunities across the economy.