Nigeria’s banking sector now has a stronger financial foundation following the recent recapitalisation exercise, but banks have been urged to ensure the new capital is used to support businesses and stimulate economic growth.
The Chartered Institute of Bankers of Nigeria (CIBN) said the increased capital base should go beyond strengthening banks’ balance sheets. It should also give lenders the capacity to provide more financing to micro, small and medium enterprises (MSMEs), which remain an important part of Nigeria’s economy.
CIBN President and Chairman of Council, Dr Dele Alabi, said the recapitalisation had created a stronger buffer that could help banks withstand economic shocks. However, he stressed that the next challenge was how lenders would deploy the additional funds.
Speaking ahead of the institute’s 19th Annual Banking and Finance Conference, Alabi said banks must rethink their traditional approach to lending and investment.
According to him, Nigerian banks have historically focused heavily on government securities and large corporate businesses. While those investments remain important, he believes the changing economic environment requires lenders to look beyond the traditional areas of banking.
He urged bank executives to become more innovative in deciding where and how to invest their capital.
Alabi noted that capital is an expensive resource for banks and should therefore be deployed in areas capable of producing meaningful economic returns. He argued that the funds raised during the recapitalisation exercise should help expand access to finance for businesses that have often struggled to obtain credit.
MSMEs are particularly important because they provide jobs, support local production and contribute significantly to economic activity. However, many small businesses continue to face challenges accessing affordable and long-term financing.
The CIBN therefore wants banks to find better ways of managing risks while making credit more accessible to these businesses.
The institute’s upcoming annual conference will focus on the theme, “Building a Resilient Economy in an Era of Disruptions: Strategic Imperatives for the Banking and Financial Services Industry.”
The event is expected to bring together major stakeholders from government, banking and the wider financial sector. President Bola Ahmed Tinubu, Vice President Kashim Shettima, Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele, and Central Bank of Nigeria Governor Olayemi Cardoso are expected to headline the conference.
World Bank Country Director for Nigeria, Matthew Verghis, is also expected to deliver the keynote address.
The conference will examine major issues affecting Nigeria’s financial system, including technological changes, cybersecurity threats, geopolitical uncertainties, climate-related risks and changing customer expectations.
For Nigerian banks, the message from CIBN is clear: stronger capital should not simply mean bigger balance sheets. The additional financial strength must translate into more productive lending, stronger businesses and broader economic opportunities.
