CBN Considers DFI Recapitalization to Bridge N122tn Gap

The Central Bank of Nigeria (CBN) is exploring the recapitalization of Development Finance Institutions (DFIs) to tackle a substantial funding gap of N122 trillion for micro, small, and medium-sized enterprises (MSMEs). Deputy Governor of Economic Policy at CBN, Muhammad Abdullahi, disclosed this during a panel session at the Nigeria Development Update by the World Bank in Abuja on Tuesday.

A recent review by the apex bank indicated that the total asset base of DFIs in Nigeria is slightly above N8 trillion, while the required funding for MSMEs is N130 trillion. Abdullahi emphasized the need for urgent sector reforms beyond merely injecting capital, highlighting that public sector capital injections alone do not make institutions bankable.

He noted that the Ministry of Finance has already reviewed the DFI structure to improve effectiveness, including an incentive framework for efficient capital deployment. The CBN aims to enhance access to finance for businesses, particularly MSMEs, which face structural challenges in Nigeria's economy.