Financial institutions in Nigeria have been strongly advised to redirect newly acquired capital toward funding micro, small, and medium-sized enterprises (MSMEs) to stimulate broader economic progress and boost financial returns.
Dele Alabi, President of the Chartered Institute of Bankers of Nigeria (CIBN), delivered this charge during the 2026 Fellowship Investiture held in Victoria Island, Lagos. He noted that the success of the recent banking recapitalisation exercise depends heavily on how efficiently lenders channel fresh funds into real, productive sectors rather than limiting exposure to top-tier conglomerates.
How can banks effectively support MSMEs?
Mr Alabi argued that extending credit to smaller businesses can be both secure and profitable provided that financial institutions establish robust institutional frameworks and risk-management structures. According to data cited by the CIBN leadership, smaller enterprises make up roughly 96 per cent of all businesses in the country, account for about 46 per cent of the gross domestic product, and provide approximately 86 per cent of total employment.
“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,” Mr Alabi remarked, adding that the institute has scheduled its inaugural MSME forum for 1 December to formulate practical financing solutions.
What do state leaders and economic experts say?
Speaking at the same gathering, Lagos State Governor Babajide Sanwo-Olu stressed that securing long-term, affordable credit remains a persistent hurdle for local enterprises. He pointed out that while the state's employment trust fund has backed over 40,000 smaller ventures through single-digit loans and grants, lenders must collaborate with government agencies to translate increased capitalization into tangible commercial activity.
Meanwhile, Tayo Aduloju, Chief Executive Officer of the Nigerian Economic SummitGroup (NESG), highlighted a sharp reduction in credit allocated to manufacturers. Mr Aduloju revealed that manufacturing loans dropped from N8.5 trillion in December 2024 to N5.6 trillion, with capital remaining heavily skewed toward oil and gas, finance, and insurance services.
“Trade has overtaken manufacturing. So, ladies and gentlemen, we are financing import and distribution of goods more readily than their production in Nigeria,” Mr Aduloju stated, citing high borrowing costs and heavy sovereign borrowing as major deterrents for industrial lenders.
During the ceremony, the institute also recognized 755 distinguished professionals for their immense contributions to the financial sector, comprising 18 honorary fellows, 460 elected fellows, and 277 honorary senior members.