April 08, (THEWILL) — The Central Bank of Nigeria (CBN) has unveiled plans to recapitalise and restructure development finance institutions (DFIs) to address a widening ₦130 trillion funding gap facing micro, small and medium enterprises (MSMEs).
The Deputy Governor for Economic Policy, Muhammad Sani Abdullahi, disclosed this during a panel session at the launch of the Nigeria Development Update by the World Bank in Abuja.
Abdullahi said a recent CBN review revealed that DFIs remain too small to meet the country’s development finance needs. According to him, Nigeria’s DFIs have a combined asset base of about N8 trillion, far below the estimated ₦130 trillion required to support MSMEs adequately.
He stressed that bridging the gap would require more than public sector capital injections, noting that DFIs must be repositioned to attract private investment.
“The focus is to make them bankable and investable, not just rely on government funding”, he said.
Abdullahi added that the CBN is collaborating with the Ministry of Finance to overhaul the sector by correcting incentives, improving risk appetite, and strengthening capital structures. The reforms will also introduce stronger market-based principles, addressing longstanding structural weaknesses.
He linked the initiative to ongoing banking sector recapitalisation, which has raised about N4.6 trillion, saying it is expected to boost lending capacity across the financial system.
However, he emphasised that the apex bank would not mandate banks on where to lend.
Abdullahi noted that limited access to finance remains a major constraint for MSMEs but expressed optimism that reforms to both commercial banks and DFIs would unlock credit to the real sector and support economic growth.
Ogochukwu Onwaeze is a writer specializing in business and economic journalism. At THEWILL News Media, she translates market trends, financial developments, and policy shifts into clear and engaging stories.
