Nigeria: CIBN Supports Banking Recapitalization for Enhanced Economic Lending

The Chartered Institute of Bankers of Nigeria (CIBN) has voiced its backing for the ongoing banking recapitalization exercise, citing its potential to bolster banks’ lending capacity to the economy.

Dr. Ken Opara, President of CIBN, reiterated this endorsement during the institute’s annual lecture held in Lagos. The lecture, themed “Improving Availability of Credit in the Nigerian Real Economy: The Critical Importance of Liquidity,” highlighted the imperative of facilitating access to credit for economic growth.

Opara emphasized the necessity of increasing credit allocation to key sectors such as agriculture, manufacturing, and services, which play pivotal roles in propelling economic development. He underscored the significance of the recent banking recapitalization initiative, stating that the upward review of Minimum Capital Requirements by the Central Bank of Nigeria (CBN) would empower banks to extend more credit to these vital sectors.

Addressing the challenges hindering credit accessibility to the real sector, Opara proposed multifaceted solutions. He urged the government to enhance the ease of doing business and invest in critical infrastructure like power, roads, and rail networks. Additionally, he recommended the establishment of industrial centers to facilitate collaboration among companies and the sharing of common infrastructure.

Furthermore, Opara suggested the harmonization and reduction of various taxes and levies, advocating for their consolidation into a single hub. He stressed the importance of banks implementing deliberate strategies to de-risk businesses in key sectors through capacity-building programs and advisory services.

Moreover, he proposed the creation of specialized financial institutions, including credit guarantee agencies and risk-sharing institutions, to complement existing entities like the Bank of Industry (BOI). Drawing inspiration from successful models like China’s, Opara emphasized the transformative potential of deepening credit access to drive economic growth.

In conclusion, Opara reiterated CIBN’s commitment to supporting initiatives aimed at enhancing liquidity and expanding credit availability to catalyze Nigeria’s economic development.