Nigerian businesses continue to face severe credit constraints despite a cooling inflation environment, highlighting a structural disconnect between macroeconomic stabilization and corporate liquidity.
New regulatory frameworks governing bank holding companies are cited as a key friction point, limiting the ability of financial institutions to extend traditional loans to the private sector.
The tightening of lending standards comes as the Central Bank of Nigeria issued interpretative guidance on the Banks and Other Financial Institutions Act, 2020.
This guidance clarified provisions regarding the maximum period for certain financial exposures, effectively reinforcing capital preservation measures that restrict bank balance sheets.
While intended to strengthen the financial system, these rules have inadvertently constrained the flow of credit to enterprises that rely on bank financing for operations and expansion.
In response to the shrinking availability of traditional bank loans, Nigeria’s corporate financing landscape is undergoing a significant structural shift.