E-Financial
CBN Mulls New Credit Mechanism for Real Sector @ Single Digit
To encourage banks to give credit to the real sector of the economy, at single digit rates, the Central Bank of Nigeria (CBN), has offered to complement the effort of Deposit Money Banks (DMBs) through a mechanism to support banks that lend to corporate entities at single digit rate.
Addressing journalists at the end of the Monetary Policy Committee (MPC) Meeting in Abuja, which saw the retention of all monetary rates, the CBN Governor Mr Godwin Emefiele disclosed that the mechanism “is not meant to bring competition among Deposit Money Banks, but it is meant to complement their efforts.”
According to Emefiele, “the most important thing is that we want to see to it that we achieve a single digit rate. We believe this will work because rather than the banks keeping the money in the reserves they can key into this and promote these transactions as long as they meet the terms and conditions.”
Specifically, Emefiele said “a differentiated dynamic cash reserve requirement regime will be implemented to direct cheap long term bank credit at nine per cent and a minimum tenor of seven years and two years moratorium to the employment elastic sectors of the economy.”
Details of this framework he said are being worked out by the banking supervision and the monetary policy departments and will be released very soon stressing that more details on this new mechanism “will be provided soon for the banks and everybody to know.
MPC was concerned that credit to the economy was sliding and we looked at means to incentivize the Deposit Money Banks to increase credit to the real sector.”
The MPC was of the opinion that while it is difficult to encourage job creation in an environment within deficit infrastructure, the committee believes that the bank should continue to encourage Money Deposit Banks to increase the flow of credit to the real economy to consolidate economic recovery.
To achieve this, Emefiele noted that two approaches were considered: the first approach, in order to achieve the objective of lowering interest rate particularly to those priority sectors- manufacturing sectors, agric sector, the CBN “will encourage large corporates to issue commercial papers/note to the market and there will be a memorandum that will detail explanations of what they are going to do with that money.”
In order to complement the effort of the banks, the CBN he said “will expect that this commercial papers will come at low rate of single digit of 9 per cent or below that and for long tenor at least a period of 7 years with a specific purpose for that loan.”
If central bank sees that kind of notes in the market, Emefiele noted that the “CBN will complement the effort of the banks through a mechanism to support that bank that lends to that corporate at single digit rate.
It is not meant to bring competition in the money deposit banks, it is meant to complement their efforts. The most important thing is that we want to see to it that we achieve a single digit rate.”
The second approach he said is “if a bank lends money for new projects and planned expansions, verifiable not refinancing, to a project for seven years inclusive of two years moratorium at 9 percent interest rate, that the bank providing this evidence and verified by the central bank, we will go into that bank’s CRR and release equivalent of that cash from our CRR at zero kobo spread.”
Emefiele explained further that “in this case, that bank earns its 9 percent of that money. We feel this is novel; it is something that we should give a chance.
In the past we have reduced CRR and release liquidity into the market but the liquidity was not channeled properly to the high impact corporations – we mean employment generating sectors or output improving sector of the economy.”
Updating journalists on the Chinese Currency swap deal, the CBN Governor revealed that they “opened the first auction last week Friday and the result from that auction will be released on Friday, but from the preliminary information I heard is that it was a successful auction. The details will be unfolded by Friday.”
About the declining foreign reserves from $47.7 billion in May to $47.2 billion in June, Emefiele said “this has nothing to do with politics. What is happening is as a result of US Fed normalisation.
Since the interest rate has gone up in the US, and other advanced economies, in an attempt to stimulate their economies, these money that moved into the emerging economies have now being taken back and this means there will be so much outflow of cash than inflow of cashflow, and of course we have our own share of it.”
He noted that “Nigeria has performed better than other emerging market around the world, with a stabilized exchange rate that has remain stable because we have been able to build enough buffer to support our currency and that is why the exchange rate has remain stable.
Countries like South Africa and others have had their currencies depreciated but the Naira remains stable at N360/$ at this time.”
Speaking on the outcome of the MPC meeting in general, Emefiele said “MPC commended the approval of the Federal Government’s 2018 budget and called for the accelerated implementation to further support the fragile growth recovery.”
The committee also called for sustained implementation of the Economic Recovery and Growth Plan (ERGP) to further stimulate output growth.
However, the MPC was “concerned about the liquidity impact of the 2018 expansionary fiscal budget and increasing FAAC distributions due to rising prices of crude oil as well as the buildup in election related activities.”
Exactly two years after the MPC decided to hold rates at 14%, at the end of Tuesday’s meeting, MPC again voted to retain the: Monetary Policy Rate (MPR) at 14.0%; Cash Reserve Ratio (CRR) at 22.5%; Liquidity Ratio at 30.0%; and Asymmetric corridor at +200 and -500 basis points around the MPR.
Defending the MOC’s decision, Emefiele stated that “in the discussion for a hold, it was noted that risk to the macroeconomic and financial environment appears fairly balanced with improvement in output growth and inflation.”
Holding policy at the current stand he said “will support growth and further moderate inflation. However, committee noted the appetite of the public for loosening and concern that hold MPR at 14 per cent since July 2016 and considering the dynamic nature of the market, the rates might have lost its signal effect on the market, hence dampen market expectations.”
“The argument in favor of maintaining the current policy stand, is to monitor the magnitude of the liquidity impact of the fiscal injections and elections related expenditures ahead of the 2019 elections” he explained.
Federal government plans to raise $2.8 billion in fresh funding as part of efforts to diversify its borrowing instruments and attract capital from global Islamic finance markets.
President Bola Tinubu asked the national assembly on October 7 to authorize $2.3 billion in new loans and a $500 million sovereign sukuk, marking what would be Nigeria’s first international sukuk issuance if approved.
“The objective is to make our borrowing more sustainable and cost-efficient,” Wale Edun, minister of Finance and Economy, said at an economic summit in Abuja, emphasizing a shift toward green bonds, diaspora bonds, and sukuk instead of traditional eurobonds.
According to Tinubu’s letter to lawmakers, the $2.3 billion borrowing will fund part of the 2025 fiscal deficit and refinance eurobonds that mature in November.
The government plans to mobilize the funds through multiple channels, including syndicated loans, eurobond sales, bridge financing via partner banks, or direct borrowing from international financial institutions.
The initiative aims to reduce Nigeria’s reliance on eurobonds while expanding its investor base to include Middle Eastern and Southeast Asian markets.
Nigeria has issued eight domestic sukuk bonds since 2017, all denominated in naira and targeted at the local market.
These Sharia-compliant instruments have financed road infrastructure projects and enjoyed strong demand — the latest, issued in May 2025, was seven times oversubscribed, according to Fitch Ratings.
The planned $500 million sukuk, denominated in U.S. dollars, would mark Nigeria’s debut in international Islamic debt markets.
Abuja aims to replicate the success of its domestic sukuk program abroad, potentially with support from the Islamic Corporation for the Insurance of Investment and Export Credit (ICIEC), a subsidiary of the Islamic Development Bank.
Nigeria’s Islamic finance industry reached $4 billion in assets by May 2025, according to Fitch.
Sukuk make up 54% of that total, followed by Islamic banking assets at 45%.
Despite rapid growth, non-interest banks still represent only 2% of Nigeria’s total banking assets, with five active institutions, including sector pioneer Jaiz Bank.
The Central Bank of Nigeria recently introduced new Islamic liquidity tools and raised capital requirements, measures expected to accelerate sector expansion in 2026.
“Nigeria has considerable potential for Islamic finance growth,” Fitch said, citing the country’s large Muslim population and significant unbanked demographic.
The proposed operation follows an upgrade of Nigeria’s sovereign rating by Fitch to ‘B’ in June 2025. The agency praised Tinubu’s reform agenda, which includes fuel subsidy removal, exchange rate unification, and fiscal restructuring, all of which improved fiscal credibility.
Nigeria returned to international capital markets in late 2024 after a nearly three-year hiatus and now seeks to consolidate its presence as a sovereign issuer while diversifying funding sources.
The global sukuk market has shown robust growth this year. Fitch projects outstanding sukuk to surpass $1 trillion by the end of 2025, while S&P Global Ratings forecasts $190–200 billion in new issuances.
Africa, however, accounts for only 2% of the global sukuk market, underscoring Nigeria’s potential to position itself as a regional leader in Islamic finance.
Securities and Exchange Commission (SEC) has named AfriQuatum, with a claimed worth of N76 billion, as a Ponzi scheme.
The regulator also urged the public to be cautious about investing with the firm.
SEC disclosed this in a recent statement.
According to the SEC, any person who places an investment or engages with the entity does so at his or her own risk, adding that its operations exhibit characteristics commonly associated with fraudulent Ponzi schemes.
“The attention of the Securities and Exchange Commission has been drawn to the activities of AfriQuantumX, which holds itself out as an investment platform trading on and selling cryptocurrency and stocks to investors in Nigeria.
“The Commission hereby informs the public that AfriQuantumX is not registered by the Commission either to solicit investments from the public or operate in any capacity within the Nigerian capital market,” SEC stated.
Mr. Olayemi Cardoso, Governor of the Central Bank of Nigeria, CBN, has said that policies such as open banking when operational will foster new opportunities for collaboration, ensuring customers benefit from competitive, tailored services by balancing innovation.
Open banking is a system that allows customers to securely share their financial data with authorized third-party providers (TPPs) through APIs (Application Programming Interfaces), enabling them to access innovative financial products and services like consolidated account dashboards, personal finance management tools, and more convenient payment methods.
Mr. Cardoso, disclosed this while speaking during the opening ceremony of the Nigeria Fintech Week 2025 in Lagos.
Cardoso, who was represented by Opemi Yusuf, the Director of Payment System Supervision at the apex bank, said that as Nigerian advances towards a cashless economy, the foundation of progress must remain trust in our payment system. Innovation loses its meaning if consumers are not confident in the safety of their money or the protection of their data.
“Initiatives such as Agent banking and microfinance expansion targets the grassroots community solution like mobile wallets and USSD services lowering barriers, but technology alone cannot close it, we must combine innovation with collaboration across government, industry and communities to build trust, improve literacy and extend financial services to rural and underserved areas. Our collective commitment must be that no regional community is left out of the Digital transformation”.
“Over the last year, we have seen strong adoption of digital channels with total electronic payments reaching over 3.9 billion transactions valued at N280 trillion in August 2024 compared to the growth of 4.12 billion transactions valued at N384 trillion by July 2025,” he stated.
The CBN Governor added that the apex bank continues to work closely with the Nigeria Electronic Fraud Forum and law enforcement agencies to combat digital crime and protect consumers.
“By balancing innovation with prudent oversight, we allow new technologies to flourish while protecting consumers and the broader financial system. A symphony is incomplete if some instruments are silent,” he said in reference to the theme of the forum.
In his opening address at the event, President of the Fintech Association of Nigeria (FintechNGR), Dr. Stanley Jacob, described this year’s theme, “The FinTech Ecosystem Symphony: Orchestrating Nigeria’s Digital Future”, — as a call to collective action.
“This is not merely an event; it has become a statement of intent,” Jacob said, urging participants to seize the opportunity to forge partnerships and make impactful deals that will shape the sector’s future.
Also speaking, Vice President of the Association and Chair of the 2025 NFW, Dr Jameelah Sharrief-Ayedun, noted that for the first time, besides having diverse sector participation, the NFW is happening concurrently in more than one city.
According to her, beyond Lagos, the event is also holding in Abuja, Delta and Enugu at the same time.
Airtel Africa Foundation Launches 100 Tech Scholarships for Nigerian Undergraduates
Lagos Trends Worldwide After Hosting E1 Lagos GP Africa’s Maiden Water Racing Event
Nigeria Seeks to Raise $2.8Bn Including its First International Sukuk
Firm Introduces a New Training ‘Large Language Models Security’
Beware of AfriQuantumX Ponzi Scheme- SEC
Telecom2 days agoAkwa Ibom, T2 Set to Drive Digital Transformation
E-Business2 days agoKaspersky, Partners Launch a Career Orientation Test to Inspire more Girls into Cybersecurity
E-Financial2 days agoAfDB to Lend Nigeria $500m in Fresh Budget Support
Telecom1 day agoChronicles Software unveils free SuccessBOX.ng platform for SS3 students, announces ₦10m reward scheme
Telecom2 days agontel Gets Fresh Capital Injection for 2026 Relaunch
E-Financial2 days agoCBN Releases New Guidelines, Caps POS Agent Daily Transactions at N1.2m
E-Financial2 days agoFidelity Bank Hosts Black-Tie Gala Honouring Afreximbank President Prof. Benedict Oramah
E-Financial2 days agoReps Plan to Regulate Cryptocurrency, PoS Operations