Expert backs CBN recapitalisation, says stronger banks will drive growth

Managing Director of FairMoney Microfinance Bank, Henry Obiekea, has expressed support for the Central Bank of Nigeria’s (CBN) ongoing bank recapitalisation programme, saying the initiative will strengthen the banking sector, expand access to finance and drive long-term economic growth.

Obiekea described the recapitalisation exercise as a strategic investment in Nigeria’s financial future, noting that it goes beyond meeting regulatory requirements to building stronger and more resilient financial institutions.

He recalled that the CBN introduced new minimum capital requirements for commercial, merchant and non-interest banks in March 2024 to reflect current economic realities, including inflation, currency depreciation and increasing demand for financial services.

According to him, many financial institutions have responded through rights issues, public offers, private placements, mergers and acquisitions to meet the revised capital thresholds.

He said the exercise is already strengthening corporate governance, improving capital planning and boosting investor confidence across the financial sector.

The FairMoney boss noted that the recapitalisation programme also extends to microfinance banks, recognising their role in providing financial services to underserved individuals, nano businesses and small enterprises.

He said stronger capital bases would enable microfinance banks to invest more in technology, cybersecurity, product innovation and risk management while maintaining public confidence.

Obiekea added that Nigeria’s rapidly growing fintech ecosystem also has a critical role to play, stressing that operators must continue to uphold strong governance, adequate capital and consumer protection standards.

According to him, well-capitalised financial institutions are better positioned to finance key sectors of the economy, including infrastructure, agriculture, manufacturing, housing and technology.

He said stronger banks would also have greater capacity to absorb economic shocks, support long-term lending and extend more credit to businesses capable of creating jobs and stimulating economic growth.

Obiekea emphasised that recapitalisation should not be measured solely by stronger balance sheets but by its impact on productive economic activities, particularly increased financing for small and medium-sized enterprises (SMEs).

He also called for closer collaboration among commercial banks, microfinance banks, fintech companies and regulators to deepen financial inclusion and bring more Nigerians into the formal financial system.

According to him, FairMoney Microfinance Bank remains committed to responsible lending, digital banking, sound risk management and technology-driven financial services that improve access to finance.

Obiekea maintained that the success of the recapitalisation programme should ultimately be reflected in stronger financial institutions, increased lending to businesses, deeper financial inclusion, enhanced consumer confidence and sustained economic growth.

He expressed confidence that with stronger capital, responsible innovation and continued collaboration between regulators and financial institutions, Nigeria is well positioned to build a more resilient banking sector capable of supporting inclusive economic development.