SMEs are poised to receive increased funding as banks strengthen their capital base

The completion of the Central Bank of Nigeria’s (CBN) 24-month banking sector recapitalization program has triggered new expectations in the financial services sector, with analysts predicting a new phase of reforms focused on credit expansion, customer protection and regional growth.

On Wednesday, the apex bank confirmed that 33 banks have successfully met the revised minimum capital requirements, marking a significant milestone in efforts to strengthen Nigeria’s financial system amid ongoing macroeconomic reforms.

According to the CBN, the deal raised a total of $4.65 trillion, pushing capital adequacy ratios across the sector above Basel benchmarks and strengthening banks’ ability to absorb shocks and support economic growth.

The regulator also revealed that 72.55% of the funds came from domestic investors, reflecting strong local participation and growing confidence in the banking sector.

The total capital raised represents an increase of 560 billion naira from the previously reported 4.05 trillion naira in February 2026.

Dr Jerry Igwilo, a former banker and CEO of Wynk Limited, argued that the industry must now move towards customer protection and accountability.

“More importantly, banks need to be thoughtful about the customer protection aspect of their business,” Igwilo said.

He criticized Nigeria’s complaints management framework, describing it as underdeveloped and insufficient for the early detection of systemic risks.

“I think the complaint management system we have in the banking sector today is very lacking. We need a consolidated digital system that allows the central bank to monitor, in real time, what customers are complaining about,” he explained.

According to him, such a system would democratize the banking sector by placing customer satisfaction at the center of performance evaluation.

“I look forward to a system where banks are not only evaluated on their capital base, but also on how well they comply with regulations, how they treat their customers, how their products are overseen and, ultimately, how they impact their customers,” he added.

Olubunmi Ayokunle, head of financial institutions ratings at Augusto & Co., predicts that the strengthened capital base would likely translate into expanded lending and broader geographic ambitions.

“We expect greater deployment of funds to support the risky sector and an expansion of the loan portfolio,” Ayokunle said.

He noted that banks with international licenses are expected to expand operations across the continent in the coming months.

“Some of them want to expand across the continent, particularly those with international banking licenses. We anticipate some announcements in the coming weeks or months,” he said.

Ayokunle also predicted greater innovation in warehousing products and greater technology investments.

“We will see more deposit products and some banks will strengthen their technology platform. SMEs will also be a target segment for deployment of funds. Over 70% of registered businesses in Nigeria are SMEs, so it makes sense for banks to focus on them,” he added.