The Centre for the Promotion of Private Enterprise (CPPE) has urged the Central Bank of Nigeria (CBN) to adopt a more balanced approach as small and medium-sized enterprises (SMEs) continue to struggle with access to affordable credit.
Speaking on Sunday while reviewing Governor Yemi Cardoso’s two-year tenure, CPPE Director-General Dr. Muda Yusuf acknowledged the CBN’s efforts in stabilizing the financial system but warned that restrictive policies were deepening credit constraints for businesses.
“The policy rate of 27.5% and the reserve requirement ratio of 50% have significantly increased the cost of financing. High interest rates have hampered private sector borrowing, particularly in manufacturing, agriculture, SMEs, real estate and other sectors,” said Mr. Yusuf.
He stressed that despite reforms aimed at strengthening governance, promoting transparency, and restoring credibility to the financial system, structural financing gaps remain unaddressed. “Small and medium-sized enterprises have limited access to affordable credit. Infrastructure, industrial, agricultural, construction, and real estate projects lack patient capital and long-term financing mechanisms,” he added.
Mr. Yusuf praised the CBN’s progress in liberalizing the foreign exchange market, enhancing corporate governance, and implementing recapitalization measures to strengthen the banking sector’s resilience. He also noted the role of monetary tightening and liquidity management in slowing inflation.
However, he cautioned that “a fully market-based approach, while improving efficiency, has not addressed structural financing gaps,” highlighting the need for targeted interventions.
Yusuf recommended adjusting policies downward as inflation eases to foster a more favorable credit environment. He also called for the development of credit guarantee schemes, concessional financing for SMEs and key sectors, and promotion of development financing instruments to support infrastructure.
He further emphasized the importance of institutionalizing governance reforms, strengthening legal frameworks to safeguard the CBN’s autonomy, and clear policy communication to manage market expectations.
“The next phase of reform must aim for a more balanced policy that supports growth while preserving macroeconomic stability,” he said. “Closing structural financing gaps and supporting governance reforms will be essential to unlocking the full potential of the financial sector as an engine of inclusive economic development.”
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