CIBN asks banks to lend more to small businesses, honors 755 professionals

The President of the Chartered Institute of Bankers of Nigeria (CIBN), Dele Alabi, has called on Nigerian banks to lend more to micro, small, and medium-sized enterprises (MSMEs). He believes this will help banks earn more after the recent recapitalisation in the banking sector.

Mr Alabi, who is also the CIBN Chairman of Council, made this statement during the 2026 Fellowship Investiture of CIBN. This event took place in Victoria Island, Lagos, on Saturday. The theme was “Bank Recapitalisation: Using New Bank Capital for Nigeria’s Industrial Transformation.”

He mentioned that the success of the recapitalisation exercise, which ended on 31 March, depends on how well the new capital is used to support productive sectors of the economy.

Mr Alabi emphasized that banks must look beyond large corporations. He urged them to expand financing to MSMEs, which he described as essential for Nigeria’s economic growth and job creation.

He noted that lending to MSMEs can be safe and profitable if banks establish proper structures and systems to handle the risks involved. “Banks no longer have the luxury of focusing only on the top-tier sectors of the economy, on the Mobiles, on the Unilevers, on the Shells,” he said.

The CIBN President also announced plans for the first MSME forum on 1 December. This forum aims to find practical ways to improve access to finance and support the growth of businesses.

Mr Alabi pointed out that MSMEs contribute about 46 percent of Nigeria’s gross domestic product, make up 96 percent of businesses, and create 86 percent of jobs.

He also revealed that the institute is looking into setting up MSME hubs in different states. This initiative will draw inspiration from models used in countries like China, India, and the United Kingdom.

755 CIBN Honorees

Mr Alabi announced that the CIBN honored 755 banking professionals for their contributions to the banking industry and Nigeria’s economy.

The honorees include 18 honorary fellows, 460 elected fellows, and 277 honorary senior members. Some notable honorary fellows recognized at the event were Samuel Egube, Deputy Chief of Staff of Lagos State; Folorunsho Alakija, Vice Chairman of Famfa Oil Limited; Tokunbo Talabi, Secretary to the Ogun State Government; and Olubunmi Kuku, Managing Director of the Federal Airports Authority of Nigeria.

Mr Alabi praised their achievements and leadership, saying they have helped improve the banking profession and contributed to the country’s economy.

He also shared that CIBN now conducts banking examinations in 13 African countries. These countries include Sierra Leone, The Gambia, Liberia, Congo, Ghana, Botswana, Cameroon, Namibia, Zambia, Rwanda, Mali, Mozambique, and Kenya.

He noted that Sierra Leone has the highest number of chartered bankers among these countries, showing the institute's growing presence in Africa.

Affordable Long-Term Financing

At the event, Lagos State Governor Babajide Sanwo-Olu said the banking sector’s recapitalisation should help banks handle economic challenges and finance bigger transactions.

He added that the real measure of success would be how much the new capital supports productive businesses, industry growth, and opportunities for Nigerians.

“One of the greatest challenges facing Nigerian businesses remains access to affordable, long-term financing. We’ve been hearing this for 20, 25 years. And so we need to do something about it,” he stated.

Mr Sanwo-Olu said manufacturers need funds to buy machinery, boost production, and compete globally, while agricultural businesses need capital for storage, processing, and distribution.

He also pointed out the opportunities in infrastructure and electricity. The governor mentioned that Lagos State’s electricity law could draw investments into the power sector and aid manufacturing, logistics, and trade.

He revealed that the Lagos State Employment Trust Fund has supported over 40,000 small businesses with grants and low-interest loans. According to him, this has helped create between 200,000 and 250,000 jobs in the state.

Mr Sanwo-Olu urged banks, the government, and the private sector to not just focus on increasing capital availability but also to ensure that this capital creates real economic activity. “We must move from simply having more capital available to making this capital work for our economy,” he said.

Credit Concerns

Tayo Aduloju, CEO of the Nigerian Economic Summit Group (NESG), expressed worries about a one-third drop in bank credit to manufacturers since December 2024. He urged banks to invest more in productive sectors of the Nigerian economy.

Mr Aduloju noted that credit to manufacturers fell from N8.5 trillion in December 2024 to N5.6 trillion, even after the banking sector recapitalisation.

He pointed out that the increase in bank capital has not led to the necessary financing for industrial growth. Lending still focuses on sectors like oil and gas, finance, and insurance.

He said these two sectors account for about 46 percent of bank credit, while manufacturing only gets 8.7 percent. “Trade has overtaken manufacturing. So, ladies and gentlemen, we are financing import and distribution of goods more readily than their production in Nigeria,” he added.

Mr Aduloju listed the cost of borrowing, liquidity issues, lending risks, and short financing durations as major barriers for businesses trying to access credit.

He mentioned that borrowing rates range from 19 percent for prime borrowers to 32.6 percent for others, while treasury bills offer about 15.5 percent returns without credit risk.

He also raised concerns about the rise in government borrowing, saying credit to the government increased by 63 percent in the year to September.

“When the sovereign borrows at this pace, it’s not a competition with business. It’s no competition. Government will win,” he said.

Mr Aduloju argued that banks need to collaborate with the government and regulators to lower the risks tied to lending to productive sectors. This includes manufacturing, agriculture, and small businesses. He added that Nigeria needs better investment projects, reliable infrastructure, clear rules, and strong credit guarantees to attract long-term financing.

He also urged the government to tidy up the national asset register, saying the lack of well-documented and investment-ready projects is stopping financial institutions from funding some opportunities.