Olayemi Cardoso, governor of the Central Bank of Nigeria (CBN), says increased capital base will enable banks take on greater risks in underserved markets.
Cardoso spoke on Tuesday during the 2024 International Financial Inclusion Conference, themed ‘Inclusive Growth, Harnessing Financial Inclusion for Economic Development’.
On March 29, the CBN announced an upward review of the minimum capital requirements for commercial, merchant and non-interest banks.
The apex bank said the increase was necessary due to prevailing macroeconomic challenges and headwinds occasioned by external and domestic shocks.
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Speaking at the conference, Cardoso said the introduction of the new minimum capital requirements for banks aligns with the CBN’s efforts to deepen financial inclusion.
He said the CBN is committed to ensuring its financial inclusion policies and initiatives address the peculiar access to finance for underserved populations, particularly women, youth, and micro, small, and medium enterprises (MSMEs).
The CBN governor stressed that financial inclusion is essential and foundational to achieving sustainable economic development in Nigeria.
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“The importance of this mission cannot be overstated, as I have reiterated that financial inclusion is fundamental and foundational to Nigeria’s sustainable economic development,” Cardoso said.
“In line with its efforts to deepen financial inclusion, the CBN recently introduced new minimum capital requirements for banks.
“This strategic move ensures that banks are well capitalised, enabling them to take on greater risks, particularly in underserved markets.
“With a stronger capital base, banks can provide more loans and financial products to MSMEs, rural communities, and other vulnerable segments that have previously struggled to access former financial services.
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“This policy not only strengthens financial stability, but also serves as a catalyst for inclusive growth. By enabling banks to extend more credit to MSMEs, we enhance job creation and productivity.”
He said with increased capital, banks can invest in technology and innovation, which are crucial for driving digital financial services such as mobile money and agent banking.
Cardoso said the technologies are vital for overcoming geographic and economic barriers, reaching even the most remote areas.
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