CBN urges banks to turn N4.65tn capital into productive loans

The Central Bank of Nigeria (CBN) has urged commercial banks to utilize the N4.65tn raised under the recapitalisation programme to provide productive loans that support businesses, infrastructure, and economic growth. Dr Muhammad Abdullahi, Deputy Governor of Corporate Services at the CBN, made this statement during the 38th Seminar for Finance Correspondents and Business Editors held in Abuja.

Abdullahi emphasized that the success of the recapitalisation exercise should not only be measured by the amount of capital raised but also by the quality of banking services and the productive lending provided by the stronger balance sheets. He highlighted the need for banks to cater to the financing requirements of various sectors such as agriculture, manufacturing, services, and infrastructure, as well as smaller firms and households.

The deputy governor also stressed that the recapitalisation should enable banks to finance long-term infrastructure projects, support industrial expansion, facilitate international trade, and compete effectively in regional and global markets. He further cautioned that capital mobilisation was just the beginning and called for stronger governance and risk management practices.

Abdullahi further highlighted that the benefits of recapitalisation should extend to rural communities, women, young entrepreneurs, and smaller businesses, ensuring wider access and better services.