Nigeria's Banks Raise N4.65 Trillion Amid Credit Crisis

Nigerian banks have successfully raised N4.65 trillion in fresh capital through a recapitalization exercise aimed at strengthening their balance sheets. Despite this, the economy is experiencing a significant credit shortage, with private sector credit accounting for only 9.4% of the Gross Domestic Product (GDP).

This figure places Nigeria among the weakest performers in Africa, highlighting critical challenges in accessing affordable financing, particularly for small and medium-sized enterprises (SMEs). The African Development Bank (AfDB) has expressed concerns regarding the financial system's inability to support long-term economic transformation.

The Central Bank of Nigeria (CBN) reported that private sector credit stood at N75.62 trillion as of February 2026, while government borrowing increased to N35.77 trillion. Dr.

Muda Yusuf of the Centre for the Promotion of Private Enterprise (CPPE) noted that banks prefer low-risk government securities over lending to businesses, which face high operational costs and lending rates ranging from 26% to 40%. SMEs, which contribute significantly to employment, receive a minimal fraction of formal credit, leading to an estimated financing gap of N48 trillion.