Digitnomics 
By Nonye Ngoka
Nigeria’s banking sector is at a critical turning point as the Central Bank of Nigeria (CBN) pushes ahead with its recapitalisation programme, a move industry stakeholders say could redefine the country’s financial landscape if properly implemented.
Henry Obiekea, Managing Director of FairMoney Microfinance Bank, believes the exercise is far more than a regulatory requirement. According to him, it represents a strategic opportunity to strengthen financial institutions, deepen financial inclusion, improve access to credit and support long-term economic growth.
“The recapitalisation programme is an investment in Nigeria’s financial future. Success should not be measured only by stronger balance sheets but by how effectively banks deploy additional capital to support businesses, create jobs and drive economic development,” Obiekea said.
In March 2024, the CBN announced new minimum capital requirements for commercial, merchant and non-interest banks. Under the framework, international commercial banks are expected to maintain a minimum paid-up capital of ₦500 billion, national commercial banks ₦200 billion, while regional commercial banks are required to have ₦50 billion. Merchant banks are also expected to maintain ₦50 billion, with national and regional non-interest banks required to hold ₦20 billion and ₦10 billion respectively.
The apex bank said the new thresholds are designed to reflect the realities of Nigeria’s evolving economy, including inflationary pressures, currency depreciation and the increasing demand for larger and more resilient financial institutions.
Since the announcement, several banks have embarked on rights issues, public offers, private placements, mergers and acquisitions to meet the new capital requirements ahead of the deadline.
According to Obiekea, the recapitalisation exercise is already driving improvements in corporate governance, capital planning and investor confidence within the banking industry.
Beyond commercial banks, the CBN has also revised capital requirements for microfinance banks, recognising their growing role in providing financial services to underserved communities, nano businesses and small enterprises.
Obiekea noted that stronger capital bases would enable microfinance institutions to invest more in digital banking infrastructure, cybersecurity, risk management and innovative financial products.
He also pointed out that although fintech companies operate under different regulatory frameworks, the industry’s direction is clear.
“As digital financial services continue to expand, institutions involved in payments, lending, savings and digital banking must maintain appropriate governance, capital adequacy and consumer protection standards,” he said.
One of the biggest expectations from the recapitalisation programme is increased access to finance for businesses, particularly small and medium-sized enterprises (SMEs).
SMEs contribute significantly to Nigeria’s Gross Domestic Product (GDP) and employment, yet many continue to face funding challenges due to limited access to affordable credit.
Obiekea argued that better-capitalised banks would be able to provide larger and longer-term financing for critical sectors such as agriculture, manufacturing, housing, infrastructure and technology.
He stressed that the true value of recapitalisation would be reflected in how much additional financing reaches productive sectors of the economy.
Despite steady growth in digital financial services, millions of Nigerians remain outside the formal financial system.
Obiekea said closing this gap would require closer collaboration among commercial banks, microfinance banks, fintech companies and regulators.
Each category of financial institution serves different customer segments, he noted, but all have a common responsibility to improve access to affordable and reliable financial services.
At FairMoney Microfinance Bank, he said recapitalisation aligns with the institution’s continued investment in responsible lending, digital banking, sound risk management and technology-driven financial inclusion.
As the recapitalisation programme progresses, Obiekea believes its success should ultimately be measured by stronger financial institutions, increased lending to businesses, deeper financial inclusion, greater consumer confidence and sustained economic growth.
He added that Nigeria already possesses one of Africa’s most vibrant financial services sectors and that, with stronger capital foundations and responsible innovation, the country is well positioned to build a banking ecosystem capable of supporting its long-term development ambitions.
For Nigeria’s financial sector, the recapitalisation exercise is shaping up to be more than a balance sheet adjustment. It could become the foundation for a stronger, more resilient and inclusive financial system capable of powering the country’s next phase of economic growth.
