CIBN TASKS BANKS ON DEEPER MSME LENDING AS YIELDS DECLINE

The Chartered Institute of Bankers of Nigeria has urged banks to increase lending to micro, small and medium-sized enterprises as investment yields decline.

The institute said banks should redirect more funds towards productive sectors of the economy, particularly businesses that require financing to expand operations, create jobs, and increase production.

CIBN noted that declining yields on some investment instruments could provide an opportunity for banks to increase credit to the real sector rather than relying heavily on low-risk financial investments.

MSMEs account for a significant share of economic activity and employment in Nigeria but continue to face challenges accessing affordable and long-term financing.

Banking industry stakeholders said increased lending to smaller businesses could support entrepreneurship, strengthen local supply chains, and improve economic productivity.

They, however, stressed the need for banks to develop lending products that reflect the realities of MSMEs, including flexible repayment structures and reasonable interest rates.

Experts also called for improved credit information, stronger risk assessment systems, and government-backed guarantees to reduce lending risks.

CIBN urged financial institutions to take advantage of technology to improve credit assessment and reach more underserved businesses.

The institute said deeper MSME financing would help banks contribute more directly to economic growth while supporting businesses as they navigate changing market conditions.

Stakeholders said sustained collaboration between banks, regulators, government agencies, and business owners would be necessary to expand access to finance and strengthen Nigeria’s MSME sector.