Sanwo-Olu, CIBN Task Banks on Productive Lending to Drive Industrial Growth

Nume Ekeghe

Governor, Babajide Sanwo-Olu; President and Chairman of Council of the Chartered Institute of Bankers of Nigeria (CIBN), Dele Alabi and former Group Chief Executive Officer of FBN Holdings Plc, Mallam Bello Maccido, have urged banks to channel funds raised through the recent recapitalisation exercise towards productive lending to businesses, particularly SMEs and manufacturers, to accelerate industrial growth.\They made the call at the CIBN Fellowship Investiture Ceremony held in Lagos over the weekend.\Speaking at the event, Sanwo-Olu said the success of the recapitalisation exercise would ultimately depend on how effectively the additional capital was deployed to support productive enterprises, expand industries and create economic opportunities.

He identified access to affordable, long-term financing as one of the major constraints facing Nigerian businesses, urging banks to increase lending to sectors capable of driving sustainable growth.

“But raising capital is only the beginning. The two major obstacles, in our view, are how effectively that capital supports productive enterprises, how it helps industrial expansion, and how it creates economic opportunities for every Nigerian,” the governor said.

He noted that manufacturers needed financing to acquire machinery, fund production and compete internationally, while agricultural businesses required capital to strengthen storage and processing capacity.

He also called for increased support for start-ups, particularly young businesses requiring seed capital to establish and expand their operations.

Sanwo-Olu stressed that the banking industry had a critical role to play in growing the Micro, Small and Medium Enterprises (MSMEs) segment, noting that improved access to financing would broaden economic participation.

Earlier, Alabi said the recapitalisation programme had mobilised N4.65 trillion in fresh capital through the Nigerian capital market, with 33 banks meeting the new capital requirements.

He described the development as evidence of the resilience of the banking industry and the growing depth of the country’s financial markets.

However, he said the priority must now shift towards ensuring that the strengthened capital base translates into investments in industries, infrastructure, business expansion and job creation.

“The question before us is no longer whether our banks have sufficient capital, but whether that capital will translate into new industries, expanded businesses, better infrastructure, thriving SMEs, sustainable jobs, and shared prosperity,” Alabi said.

He said Nigeria had a significant opportunity to deploy the additional capital towards manufacturing, agriculture, infrastructure, energy and technology.

Also speaking, Maccido urged banks to reconsider their asset allocation strategies, warning against excessive concentration in treasury instruments at the expense of lending to the real sector.

Citing a World Bank report, he said that since the completion of the recapitalisation exercise in March 2026, treasury bills had increased as a proportion of banks’ total assets from 18 per cent to 22 per cent, while loans had remained unchanged at 22 per cent.

He described the trend as a concern, urging banks to direct more capital towards industries that could support economic transformation.

“So, I’m appealing to you, my friends and fellow bankers, as I move into the advisory world, having grown older in banking. We need to look at the critical industries necessary to drive the transformation of our economy,” he said.

Maccido argued that lending was not merely a regulatory obligation but a profitable business that offered banks multiple income streams, including interest income, foreign exchange earnings, letters of credit commissions and other fees.

“Lending itself is a very good business because the income streams from lending are diverse. From interest income to exchange income, letters of credit commissions and other fees, there is quite a wide array of income streams that banks can generate from lending. So, lending is not something you are doing simply because the regulatory authorities are pushing or forcing you to do it. You are actually making money from it,” he said.

He further noted that lending to carefully selected sectors, including SMEs, could deliver higher net yields than treasury instruments, given the relatively lower returns associated with risk-free assets.

Maccido urged banks to prioritise manufacturing, industrial parks and other critical sectors that would strengthen domestic production.

“I would like to see us focus on manufacturing, industrial parks and other critical sectors that will drive the creation of a productive economy. That is the whole essence of the recapitalisation exercise stipulated by the CBN,” he said.