By By Elizabeth Ugbo
The Centre for the Promotion of Private Enterprise (CPPE) has commended the Central Bank of Nigeria (CBN) for a successful bank recapitalisation exercise, revealing that 32 banks met new capital requirements in Nigeria over the weekend, as policymakers now face pressure to improve credit access for businesses and households.
Recapitalisation Strengthens Banking System
CPPE described the recapitalisation process as orderly, non-disruptive, and confidence-boosting. The group noted that the exercise marked a major milestone in strengthening the resilience of Nigeria’s banking system.
According to CPPE Executive Director, Muda Yusuf, the process recorded no depositor losses. It also avoided forced mergers, job cuts, or shareholder value erosion.
He explained that this outcome reflects stronger regulatory oversight and improved market discipline. Furthermore, he stressed that the development signals growing stability in the financial sector.
“This marks a significant improvement over past consolidation episodes,” Yusuf said.
Weak Link Between Banks and Real Economy
Despite the progress, CPPE raised concerns about the weak connection between banks and the real economy. It urged the CBN to prioritise policies that improve financial intermediation.
The group highlighted that private sector credit remains low. It currently stands at about 17 percent of Nigeria’s Gross Domestic Product (GDP) as of 2025.
In comparison, other sub-Saharan African countries and emerging economies record higher ratios. Therefore, CPPE warned that limited lending continues to slow economic growth.
SMEs Struggle with Limited Credit Access
CPPE also pointed to the challenges facing small and medium enterprises (SMEs). It revealed that SME credit accounts for only about one percent of total bank lending.
However, SMEs contribute significantly to employment and economic output. As a result, the group stressed the need to expand financing for the sector.
In addition, CPPE noted that consumers also face difficulties accessing credit. This situation, it said, weakens domestic demand and slows economic activity.
Call for Targeted Financial Reforms
To address these gaps, CPPE urged policymakers to implement targeted reforms. It recommended measures to boost private sector lending and improve credit infrastructure.
Moreover, the group called for incentives that support long-term financing in key sectors of the economy. It emphasised that stronger banks must translate into real economic growth.
CPPE concluded by urging a more balanced allocation of credit. It also advised authorities to tackle structural barriers limiting access to finance.
