CBN MULLS RECAPITALISATION OF DFIs TO BRIDGE N130TN MSME FINANCING GAP
Read Time:1 Minute, 44 Second
By Aishat Momoh. O.
The Central Bank of Nigeria (CBN) is considering the recapitalisation and restructuring of Development Finance Institutions (DFIs) to address a widening financing gap facing micro, small, and medium-sized enterprises (MSMEs).
The Deputy Governor for Economic Policy, Muhammad Abdullahi, disclosed this during a panel session at the launch of the Nigeria Development Update by the World Bank in Abuja.
Abdullahi revealed that a recent review by the apex bank showed that the total asset base of DFIs in Nigeria stands at just over ₦8 trillion, far below the estimated ₦130 trillion required to meet the credit needs of MSMEs.
“The only way to address this is not only through public sector capital injections into these institutions, but also by making them bankable and investable,” he said.
He explained that the CBN, in collaboration with the Ministry of Finance, is reviewing the structure of DFIs to improve efficiency, risk appetite, and capital deployment. The reform, he noted, would introduce stronger market-based principles into their operations.
According to him, improving access to finance remains a major structural challenge in Nigeria’s economy, particularly in ensuring that credit flows effectively to the real sector.
Abdullahi added that recent banking sector recapitalisation efforts are expected to complement the reforms, with about ₦4.6 trillion raised by banks to strengthen their capital base. This, he said, should translate into increased lending capacity.
However, he cautioned against directed lending policies, stressing that banks must retain independence in credit decisions and conduct proper risk assessments.
“With the mix of stronger commercial banks and reformed DFIs, we expect significantly more credit to flow to businesses,” he said.
He also highlighted the resilience of business activity despite high borrowing costs, noting that the Purchasing Managers’ Index has remained above the 50-point threshold, indicating continued economic expansion.
The CBN had earlier disclosed that 33 banks met the new minimum capital requirements under its recapitalisation programme, raising a combined ₦4.65 trillion, with local investors contributing 72.55 per cent and foreign investors accounting for 27.45 per cent of the funds.
Happy
0 %
Sad
0 %
Excited
0 %
Sleepy
0 %
Angry
0 %
Surprise
0 %
0
0