The Centre for the Promotion of Private Enterprise (CPPE) has commended the Central Bank of Nigeria (CBN) for successfully implementing the bank recapitalisation programme.
In a policy brief on Sunday in Lagos, CPPE said 32 banks met the new capital requirements without disruptions or losses.
However, its Chief Executive Officer, Dr Muda Yusuf, said the stronger capital base had yet to translate into sufficient support for the real economy.
He noted that private sector credit remained at about 17 per cent of Gross Domestic Product (GDP), below regional and peer benchmarks, while consumer and Small and Medium-scale Enterprise (SME) lending levels were still low.
Yusuf said SMEs accounted for only about one per cent of total credit, in spite of their critical role in economic growth.
He also highlighted concerns over short-term lending and skewed credit allocation across sectors.
According to him, high interest rates and increased government borrowing continued to constrain credit expansion.
He called for policy measures to improve credit access and channel funding to productive sectors.
“The recapitalisation programme has strengthened the resilience and stability of the banking system, and the Central Bank of Nigeria deserves credit for a smooth and effective process.
“However, the real test lies in how well the banking system supports investment, enterprise, job creation and economic transformation.
“At this stage, the focus should shift from capital strength to economic impact. Nigeria needs not just stronger banks, but banks that deliver for the economy,” he said. (NAN)(www.nannews.ng)
