Oyedele Tasks Banks to Disburse More Loans to Productive Sectors, Businesses

By Adedapo Adesanya

The Minister of Finance and Coordinating Minister of the Economy, Mr Taiwo Oyedele, has urged Nigerian banks to channel more capital into productive businesses and sectors capable of driving investment, job creation and economic growth.

Representing President Bola Tinubu at the opening of the 19th Annual Banking and Finance Conference of the Chartered Institute of Bankers of Nigeria (CIBN) in Abuja, Mr Oyedele said the banking industry must move beyond financial intermediation to play a greater role in transforming the economy.

He said the country’s improving macroeconomic stability should not be mistaken for prosperity, stressing that the ultimate objective of the ongoing reforms is to translate stability into investment, production, jobs, and improved living standards.

“A resilient banking system cannot exist indefinitely where businesses cannot obtain affordable credit. Manufacturing that is struggling cannot expand, and millions of productive companies remain outside the formal financial system,” he said.

He said the current phase of the country’s reform journey was accelerating the conversion of stability into investment, investment into production, production into jobs, and growth into improved living standards.

The Minister said the banking and financial services industry was central to the current transformation process.

“Therefore, we need to move from intermediation to transformation,” he stated.

He said that while financial institutions had traditionally been measured by balance sheet growth, profitability and shareholder returns, there was an increasing need to assess what the financial system was doing for the real economy, noting that a resilient banking system could not be sustained where businesses were unable to access affordable credit.

“A resilient banking system cannot exist indefinitely where businesses cannot obtain affordable credit.

“Manufacturing that is struggling cannot expand, and millions of productive companies remain outside the formal financial system.”

Mr Oyedele urged banks to reassess how they allocated capital, stressing that the success of the recently concluded banking recapitalisation exercise should be measured by its impact on the real economy rather than merely by larger balance sheets.

“A bigger bank that does not finance a more productive economy is a suboptimal outcome,” he said.

The finance minister also urged banks to move away from excessive reliance on government securities, which he said had made lending to productive businesses comparatively less attractive.