Nigerian banks raised about N6.4tn from the recently concluded recapitalisation exercise, but fewer than one in 20 micro, small and medium enterprises can access bank credit, the World Bank has said.
The development has renewed concerns over the ability of the banking sector to translate its stronger capital base into affordable financing for businesses and other productive sectors of the economy.
The World Bank Country Director for Nigeria, Mathew Verghis, represented by the Senior Private Sector Specialist at the World Bank Nigeria office, Bertine Kamphuis, disclosed this on Tuesday at the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria in Abuja.
According to the World Bank, domestic credit to the private sector remains at about 13 per cent of the country’s Gross Domestic Product, while MSMEs receive only about one per cent of total credit and agriculture accounts for roughly six per cent.
“Credit is thinnest where job intensity is highest. MSMEs receive around one per cent of credit only. Agriculture gets about six per cent. This is where the jobs are,” Verghis said.
He added that fewer than one in 20 MSMEs could access bank credit despite the critical role of small businesses in employment generation.
The disclosure came as President Bola Tinubu urged banks to ensure that the recently completed recapitalisation exercise results in cheaper and more accessible credit for businesses.
Tinubu, who was represented by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, said stronger bank balance sheets would have little value if businesses continued to struggle to obtain affordable financing.
“The recently concluded bank recapitalisation must produce more than bigger balance sheets. It must translate into capital formation in the real economy, financing Nigerian businesses as they expand across Africa and pursue our ambition of a trillion-dollar economy,” the President said.
He warned that the banking sector must move beyond financing government and play a greater role in supporting private investment, production and job creation.
“A bigger bank that does not finance a more productive economy is a sub-optimal outcome,” Tinubu added.
The President also called for a gradual shift from government securities towards private-sector lending, noting that attractive returns on government securities had made lending to productive businesses less compelling for banks.
He said the Federal Government was expanding guarantees, risk-sharing, blended finance and credit-enhancement mechanisms, with the National Credit Guarantee Company expected to play a central role in reducing the risks associated with lending to productive sectors.
The Chairman of the Body of Bank CEOs and Group Managing Director of United Bank for Africa, Oliver Alawuba, said the recapitalisation had strengthened the capacity of banks to finance the economy.
Alawuba disclosed that banks raised N6.4tn during the exercise, improving their resilience, risk-management capacity and ability to finance large-scale projects.
“Our task now, as banks, is how to convert this strong capital and smart systems we have built into affordable, productive credit to MSMEs, agriculture, manufacturing, infrastructure and exports, so that the banking industry resilience becomes national prosperity,” he said.
The President and Chairman of the Council of the CIBN, Dr Dele Alabi, said 33 banks had met the revised minimum capital requirements as of March 2026, raising approximately N4.65tn, with about 72 per cent of the funds coming from domestic investors.
He said the banking sector now had the capacity to contribute more significantly to economic growth through targeted lending to productive sectors.
Meanwhile, the CBN Governor, Olayemi Cardoso, represented by the Deputy Governor, Economic Policy Directorate, Philip Ikeazor, said the recapitalisation exercise demonstrated the depth of Nigeria’s domestic capital market.
Cardoso, however, acknowledged concerns over when the benefits of improving macroeconomic conditions would reach ordinary Nigerians.
“The question that remains on everyone’s mind is, when will the common man feel the full benefits? That is on its way,” he said.
Lagos State Governor, Babajide Sanwo-Olu, represented by the Commissioner for Finance, Abayomi Oluyomi, also urged banks to direct more capital towards SMEs, manufacturers, farmers and entrepreneurs.
“The real test of our financial system is not simply the strength of its institutions, but what that strength enables in the wider economy,” he said.
