By Kingsley Samuel
As Nigerian banks raise fresh capital to comply with the Central Bank of Nigeria’s, CBN, recapitalisation directive, the bigger challenge is ensuring the new funds help solve the country’s chronic shortage of credit for small businesses and financially excluded Nigerians, Managing Director of FairMoney Microfinance Bank, Henry Obiekea, has said.
Obiekea said recapitalisation should go beyond meeting regulatory thresholds and become a tool for unlocking affordable financing, expanding financial inclusion and driving sustainable economic growth.
In an article titled “How Nigeria’s Banking Sector Can Maximise the Benefits of Recapitalisation,” he argued that stronger capital alone would not transform the economy unless it is channelled into productive sectors that generate jobs and stimulate growth.
According to him, small and medium-sized enterprises (SMEs), which account for a significant share of Nigeria’s economy and employment, continue to face limited access to financing despite their critical role in national development.
He noted that well-capitalised financial institutions are better positioned to finance infrastructure, agriculture, manufacturing, housing and technology while absorbing economic shocks and supporting long-term lending.
Obiekea also identified collaboration among commercial banks, microfinance banks, fintech companies and regulators as a key solution to Nigeria’s financial inclusion challenge, noting that each serves different customer segments but shares the common goal of bringing more Nigerians into the formal financial system.
He said the CBN’s revised capital requirements for microfinance banks would strengthen their capacity to invest in digital technology, cybersecurity, product innovation and sound risk management, enabling them to serve underserved individuals and small businesses more effectively.
The FairMoney MD added that Nigeria’s rapidly expanding fintech sector also has a vital role to play in delivering responsible digital lending and banking services to millions of Nigerians who remain outside the traditional banking system.
“Success should ultimately be measured by stronger institutions, deeper financial inclusion, increased SME financing, enhanced consumer confidence and sustained economic growth. Capital itself does not transform economies; how that capital is deployed does,” he said.
Obiekea stressed that while the recapitalisation programme may pose short-term challenges for some institutions, its long-term benefits would include a stronger, more resilient financial system capable of supporting Nigeria’s development ambitions.
He maintained that with responsible innovation, strategic investment in technology and continued collaboration between regulators and financial institutions, Nigeria can transform the recapitalisation exercise into a lasting solution for expanding credit, empowering businesses and building a more inclusive economy.
