The World Bank is set to approve a $500m loan to Nigeria on Friday (today) as part of efforts to expand access to finance for micro, small and medium enterprises across the country.

The proposed facility, titled the Fostering Inclusive Finance for MSMEs in Nigeria (FINCLUDE) Project, aims to mobilise private capital and promote innovative financial products for small businesses, according to information obtained from the World Bank.

Negotiations on the loan are ongoing, and approval by the World Bank Group’s board is expected on Friday. The approval, expected on December 19, 2025, will see the World Bank commit $500m to the project out of an estimated total cost of $2.39bn.

Of the World Bank financing, $400m will be provided by the International Bank for Reconstruction and Development, while $100m will come from the International Development Association.

The Federal Government will be the borrower under the arrangement, with the Development Bank of Nigeria serving as the implementing agency with overall responsibility for managing the funds. The remaining $1.89bn required for the project is expected to be provided by commercial lenders as unguaranteed financing.

According to the World Bank, the FINCLUDE project will leverage the platforms of the Development Bank of Nigeria and its subsidiary, Impact Credit Guarantee Limited, to deepen credit access for MSMEs.

“The proposed FINCLUDE Project leverages the platforms of the Development Bank of Nigeria and its subsidiary, the Impact Credit Guarantee Limited, to drive inclusive MSME finance,” a document from the World Bank read. “Through these catalytic institutions, the project will deploy a package of complementary, inclusive, and innovative instruments tailored to the diverse needs of MSMEs in Nigeria.”

The World Bank described DBN as “a partner well known to the World Bank with high implementation capacity and a proven track record in designing and executing complex, innovative projects,” noting that its role would be central to the success of the intervention.

The project is structured around three main components. These include the provision of inclusive and innovative MSME finance products, the de-risking and mobilisation of private capital through partial credit guarantees, and technical assistance aimed at modernising and digitising Nigeria’s MSME finance ecosystem.

Under the first component, the World Bank said the project would provide Tier 2 subordinated capital to eligible financial institutions and support the establishment of an MSME investment fund to deliver equity and long-term debt financing to small businesses. The bank said this approach would help “crowd-in private capital, test market innovations and promote financial sustainability” within the MSME segment.

Also, the project will offer targeted technical assistance to strengthen the capacity of financial institutions, improve regulatory oversight and modernise the MSME finance value chain linking DBN, lenders and entrepreneurs.

In its appraisal report, the World Bank highlighted Nigeria’s ongoing economic reforms, describing the country as being “in a critical transition.” It noted that the removal of fuel and foreign exchange subsidies, alongside the unification of exchange rates, had begun to stabilise the economy and restore investor confidence.

“These reforms have improved fiscal space, enhanced FX liquidity, and eased inflation to 18 per cent as of September 2025,” the report stated, adding that growth prospects were strengthening, with the International Monetary Fund projecting 3.9 per cent real GDP growth in 2025.

Despite these improvements, the World Bank warned that access to finance remained uneven, particularly for MSMEs, women and the agriculture sector. It noted that agriculture accounted for just over five per cent of total bank credit in 2024, while high interest rates and shallow credit penetration continued to constrain lending to smaller enterprises.

If approved on Friday, the FINCLUDE project will add to Nigeria’s growing portfolio of World Bank-supported programmes. As of June 30, 2025, Nigeria’s external debt stood at $46.98bn, according to the Debt Management Office.

The World Bank Group remains Nigeria’s largest single creditor, accounting for $19.39bn of the total, comprising $18.04bn from the IDA and $1.35bn from the IBRD. This represents 41.3 per cent of the country’s external debt, underscoring the bank’s dominant role in financing Nigeria’s development initiatives.

The PUNCH earlier reported that the World Bank loans to Nigeria between 2023 and 2025 are projected to reach $9.65bn by the end of this year as fresh approvals, ongoing negotiations, and disbursements gather pace across key sectors.

The amount covers International Bank for Reconstruction and Development and International Development Association loans only, according to an analysis of data on the bank’s website by The PUNCH. When grants are added, total World Bank support rises to about $9.77bn within the three-year window.

The International Bank for Reconstruction and Development provides loans on commercial or near-commercial terms to middle-income and creditworthy low-income countries, while the International Development Association offers highly concessional loans and grants to the world’s poorest nations.

The PUNCH also reported that Nigeria’s stock of World Bank International Development Association loans rose to $18.5bn, making it the largest IDA borrower in Africa and the third-biggest in the world.

Fresh data from the IDA’s unaudited financial statements for the third quarter of 2025 confirmed that the country has maintained the ranking it first attained in 2024, when it climbed to third place after overtaking India. The country was the fourth-largest borrower in 2023.

According to the report, Nigeria’s exposure increased from $17.1bn in September 2024 to $18.5bn in September 2025, representing a rise of $1.4bn or 8.2 per cent. The increase reflects the country’s heavier reliance on concessional financing to plug infrastructure gaps, stabilise its reform programme, and support social spending amid volatile oil earnings.

Economists warn that the rising loan pipeline, while potentially beneficial for long-term development, could deepen fiscal pressures if not matched with stronger domestic revenue mobilisation and prudent expenditure management.

Lagos-based economist, Adewale Abimbola, reacting to the rising World Bank commitments to Nigeria, said loans from multilateral institutions such as the World Bank are largely concessionary, with interest rates typically below market levels and longer repayment tenors.

He noted that the critical question is not whether Nigeria should be borrowing, but whether the loans are structured and deployed effectively. “If it’s concessionary and tied to viable projects with medium-term revenue prospects, I don’t think it’s a bad idea,” Abimbola explained. “Borrowing isn’t bad; what matters is utilisation.”

He stressed that the economic impact of such loans depends on how well they are channelled into projects that can generate sustainable growth, strengthen revenue, and improve public services over time.

TotalEnergies Marketing Nigeria Plc has launched the TotalEnergies Mobility Card Plus, positioning it as a technology-driven upgrade designed to deliver stronger security, real-time control and greater convenience for individual users and businesses across the country.

Unveiling the card on Tuesday in Lagos, the company said TEMC+ sets a new standard for mobility and secure payments by combining enhanced digital features with tools that allow customers, particularly fleet operators, to manage transactions and accounts directly and instantly.

The launch marks the start of a nationwide migration from existing cards to TEMC+, which is already underway and scheduled to be completed by 31 December 2025.

The Managing Director of TotalEnergies Marketing Nigeria Plc, Dr Samba Seye, said the new platform reflects the company’s long-standing focus on innovation and customer satisfaction.

Represented by the General Manager, Retail and Cards, Abdullahi Umar, he noted that TEMC+ was developed to meet the demands of the digital era and evolving customer needs.

“At TotalEnergies, our vision has always been to make mobility smarter, safer and more convenient for everyone. Today, with TEMC+, we are taking a bold step forward in delivering greater convenience, control and security for both individual customers and businesses of all sizes,” Seye said.

He described TEMC+ as more than a mobility card, explaining that it is a technology-driven platform built to simplify operations and enhance customer experience. The solution offers online secure transactions, mobile app integration for real-time account visibility, pre-authorisation for accurate fuel dispensing, instant SMS alerts, virtual card capabilities and on-the-spot fund reallocation.

“This launch is not just about a product. It reflects our commitment to innovation and customer satisfaction,” he said, adding that customers would experience live demonstrations, guided sessions on digital account management and support through the migration process.

Giving details, the Project Manager, TEMC+, Osarobo Aigbogun, said the upgrade was shaped directly by customer feedback and represents growth rather than replacement of the existing Total Card.

“We listened to you and went back to the drawing board. Today, we are proud to introduce TEMC+, the next evolution of Total Cards. This represents growth, not replacement. We are improving what we had before,” Aigbogun said.

He explained that TEMC+ introduces three payment options: card payment, mobile app payment and one-time password payment, giving customers flexibility even without internet access. Fleet managers now have real-time access to an extranet that allows them to blacklist or whitelist cards, manage card limits, transfer funds between cards, fund wallets instantly, generate PINs and unblock cards without contacting TotalEnergies.

“Now, when you credit your funds, you get them immediately, and you can use them straight away,” he stressed, adding that the platform improves agility and simplifies reconciliation for businesses.

Deposit Money Banks are shoring up their capital base as the Central Bank of Nigeria intensifies oversight, reinforcing governance, transparency, and risk management to ensure a resilient, stable financial system, OLUWAKEMI ABIMBOLA writes

Nigeria’s banking system remains stable and resilient, a key pillar of the country’s financial stability. Yet the Central Bank Governor, Olayemi Cardoso, says the apex bank continues to stay alert to emerging risks such as cyber threats, credit-concentration pressures, and operational vulnerabilities. These challenges, he explained, are being managed through strengthened risk-based supervision and the ongoing transition to Basel III, which is expected to enhance capital quality, reinforce resilience, and improve liquidity monitoring as the banking recapitalisation drive progresses.

Nigerian banks are navigating one of the most defining periods in their history. Importantly, members of the Monetary Policy Committee have acknowledged that the system remains safe and sound. At the 303rd MPC meeting in Abuja, the committee expressed satisfaction with the sustained strength of the banking sector, noting that most financial soundness indicators continue to fall within regulatory benchmarks.

Committee members also recognised the significant progress recorded in the recapitalisation programme, with 16 banks already fully meeting the revised capital requirements. They encouraged the CBN to ensure the programme is completed successfully.

With just under four months remaining before the conclusion of the recapitalisation exercise, Cardoso confirmed that the process remains firmly on course. Speaking at the recent Bankers’ Dinner in Lagos, he noted that several banks have already met the new capital thresholds, while others are steadily advancing and are well positioned to meet the 31 March 2026 deadline.

“To date, 27 banks have raised capital through public offers and rights issues, and sixteen have already met or exceeded the new requirements, a clear testament to the depth, resilience, and capacity of Nigeria’s banking sector,” he said.

“As we strengthen the capacity of our banks, stress-testing this year confirms that Nigeria’s banking sector remains fundamentally robust. Key financial soundness indicators overwhelmingly satisfied prudential benchmarks during the year,” he added.

Credit-risk framework

The CBN is also redesigning the banking sector’s credit-risk framework to safeguard the estimated N4.14tn in new capital being raised. Cardoso said the bank is enforcing stronger governance, transparency, and accountability to protect these funds. This effort is supported by a newly established Compliance Department, now fully operational, with mandates covering financial crime supervision, market conduct, enterprise security, corporate governance, and environmental, social, and governance issues.

According to him, the strengthened controls will ensure that the new capital is properly managed. “As recapitalisation progresses, we are redesigning the credit-risk framework to enforce stronger governance, greater transparency, and firmer accountability across the sector. We are determined to break the boom-and-bust cycle that has accompanied past recapitalisation efforts,” he stated.

The CBN’s Credit Risk Management System is now web-enabled, allowing banks to access its database for statutory returns and borrower checks. The apex bank is also integrating the system with banks’ internal platforms to improve efficiency.

A Deloitte report titled “Nigeria’s macro headwinds trigger bank recapitalisation” estimates that banks will raise about N4.14tn before the exercise ends in March 2026. The report noted that the sharp increase in minimum capital requirements, ranging from N50bn to N500bn depending on licence type, is essential to meet the industry’s capital adequacy needs amid inflation, high interest rates, currency volatility, and forex constraints.

The report added, “The upward revision will ensure that Nigerian banks have the capacity to take on bigger risks and stay afloat amid both domestic and external shocks. It also means an increased liquidity position of banks, which will help broaden their loss-bearing capabilities.”

Cardoso maintained that Nigeria’s banking system remains sound and resilient. “At the same time, we remain vigilant to emerging risks, including cyber threats, credit-concentration pressures, and operational vulnerabilities,” he said. He reiterated that the Basel III transition will further strengthen the system’s resilience.

The CBN is also reinforcing operational discipline to ensure that the financial system works efficiently for all Nigerians. Cardoso explained that the bank undertook an end-to-end review of the entire cash lifecycle—production, transportation, distribution, and consumer access. This review, he noted, informed steps such as recalibrating cash-printing models, issuing ATM-to-card ratio guidelines, strengthening approvals for ATM or branch closures, sanctioning banks whose ATMs fail to dispense cash, and enhancing supervision of POS operators nationwide.

These regulatory interventions reflect the CBN’s commitment to supporting the government’s ambition of achieving a $1tn GDP by 2030, as proposed in the Policy Advisory Council’s national economic plan. A well-capitalised banking sector is considered critical to realising this vision. Cardoso said banks must be sufficiently capitalised to support future economic expansion.

“Will Nigerian banks have sufficient capital relative to the financial system’s needs in servicing a $1tn economy in the near future? In my opinion, the answer is ‘No!’ unless we take action,” he said, noting that the ongoing recapitalisation will enable banks to attract significant transactions and support growth.

The CBN has assured the public and depositors that the sector remains secure. “The CBN affirms that it continues to monitor all financial institutions under its regulatory purview and maintains robust frameworks for early warning signals and risk-based supervision,” the bank stated.

Road to recapitalisation

On 28 March 2024, the CBN announced a two-year recapitalisation programme that began on 1 April 2024. Minimum capital was increased to N500bn, N200bn, and N50bn for commercial banks with international, national, and regional licences, respectively. Merchant banks must hold N50 bn, while non-interest banks require N20bn (national) and N10bn (regional). The compliance deadline is 31 March 2026.

Cardoso said the policy is expected to drive inclusive growth by enabling banks to extend more credit to MSMEs and invest in technology and innovation, which are vital for expanding digital financial services and improving access in remote areas.

Under the recapitalisation exercise, the CBN adopted a distinct definition of minimum capital base, comprising paid-up capital and share premium only, excluding reserves and retained earnings. This means most banks must raise fresh capital even if their shareholders’ funds exceed earlier requirements.

Cardoso emphasised that the sector remains strong. “The non-performing loan ratio remains within the prudential benchmark of five per cent,” he said, adding that the liquidity ratio also surpasses the 30 per cent regulatory minimum. He noted that recent stress tests reaffirm the system’s overall robustness.

CBN Deputy Governor (Corporate Services), Ms Emem Usoro, said achieving a $1tn economy requires structured planning, clear policies, and committed implementation. She emphasised that recapitalisation is a key pillar of this goal, noting that banks must be equipped to finance a larger economy. “As we work towards building a $1tn economy, we must consider the recapitalisation of our banks to be able to fund, finance and power the economy,” she said in Abuja.

United Bank for Africa Group Managing Director, Oliver Alawuba, described the recapitalisation exercise as timely and necessary to strengthen the financial system. According to him, it will help the sector withstand inflation, currency instability, and global geopolitical shocks while positioning banks to finance large-scale infrastructure and industrial projects.

What the law says

The Central Bank of Nigeria Act of 2007 mandates the CBN to promote financial system stability. The bank fulfils this responsibility through reforms, greater access to finance, institutional capacity building, and enforcement of strong corporate governance practices.

Analysts note that financial system stability is essential because bank failures can erode public confidence, reduce savings and investment, disrupt the money supply, and trigger payment system breakdowns with harmful effects on the real economy. A stable financial system also strengthens the transmission of monetary policy, ensuring that authorities can achieve their primary objective of price stability.

Over the years, the CBN has introduced several reforms aimed at strengthening the banking industry and ensuring the effective functioning of the financial system.