Business
Mixed Reactions Trail CBN’s Loan To Electricity Firms
Mixed reactions have
continued to trail the recent disbursement of N18.2 billion loan to the five private electricity companies saddled with power generation and distribution in Nigeria.
The Tide gathered that the loan was the first batch of the N213 billion Nigerian Electricity Market Stabilization Facility which is aimed at boosting power supply in the country.
Some consumers in Port Harcourt, who spoke with our correspondent at the weekend said the loan is uncalled for as the Federal Government had already privatised the generation and distribution of power.
According to them, available records have it that the Port Harcourt Electricity Distribution Company (PHEDC) out of the amount had a sum of N6.58 billion.
Some of the consumers who expressed their views said with the loan, PHEDC and other companies would improve on their power supply, and commended the Central Bank of Nigeria (CBN) for the life-line aimed at giving comfort and succor to the masses.
An Energy Correspondent with the Rivers State Newspaper Corporation (RSNC), Mr Chris Oluoh, in his reaction over the loan said, it shows Federal Government’s strong determination to ensure adequate power supply to service the socio-economic life of the people.
But one would suggest that the power firms, both GENCOS and DISCOS should be strictly monitored on how they spend this huge funds to actualize the dream.
“The new power firms appeared not to be serious in fulfilling the aims of the privatization of the sector. They must therefore show concrete proof by giving Nigerians adequate power supply with the billions.
A petty trader that resides at Eagle Island, Port Harcourt Happiness Adonam, said since the coming of PHED, there had been improved power supply in their area, but would plead that they maintain the spirit with the provision of the loan to up grade their services to the people of the state.
Miss Adonam noted that with constant electricity supply business will strive and thanked CBN and the Federal Government for the intervention. Elder Theordore Nwadike, a retired company staff has this to say, “for the Central Bank of Nigeria to give intervention loan to PHED is one thing, to utilize the loan effectively for its purpose is another thing. But I believe there is going to be improvement in electricity supply in the country and in Rivers State in particular.
A welder, innocent Udofia, said that since the privitisation of the power supply, the companies concerned have not been living up to expectation, and for the Federal Government to approve and disburse a loan of such magnitude is a waste of fund, since they are private companies that bidded to handle the power sector better for Nigerians.
“I am not in any way in support of the CBN intervention loan to these private electricity companies even though it was aimed at improving power supply. If they cannot handle the project, let them hands –off for competent companies.
Meanwhile, The Tide learnt that the loan was disbursed at the rate of 10 per cent interest and to be repaid in 10 years, with a view to investing it in plant maintenance, upgrade of transmission and distribution networks, acquisition of transformers and effective meter reading of consumers.
It was futher gathered that the disbursement of the loan was a follow up to the memorandum of understanding (MOU) reached and signed by the CBN, participating Deposit Money Banks and the Nigeria Electricity Regulatory Commission last December.
Collins Barasimeye
Trading floor of Nigerian Stock Exchange (NSE)
The Central Bank of Nigeria (CBN) yesterday said 33 banks have met new minimum capital requirements under its recapitalisation programme, raising a combined N4.65 trillion to strengthen the financial system.
The apex bank disclosed this in a statement marking the end of the exercise, which commenced in March 2024 and drew participation from domestic and foreign investors.
The statement was jointly signed by the Director of Banking Supervision, Olubukola Akinwunmi, and the Acting Director of Corporate Communications, Hakama Sidi-Ali.
The statement said “Over the 24-month period, Nigerian banks raised a total of N4.65tn in new capital, strengthening the resilience of the financial system and enhancing its capacity to support the economy.”
The regulator said local investors accounted for 72.55 per cent of the funds, while international investors contributed 27.45 per cent, reflecting continued confidence in the sector.
Commenting on the outcome, the CBN Governor, Olayemi Cardoso, said in the statement, “The recapitalisation programme has strengthened the capital base of Nigerian banks, reinforcing the resilience of the financial system and ensuring it is well-positioned to support economic growth and withstand domestic and external shocks.”
It added that while 33 banks have complied with the new thresholds, a few others are still undergoing regulatory and legal processes.
The statement noted, “The CBN confirms that 33 banks have met the revised minimum capital requirements established under the programme.
“A limited number of institutions remain subject to ongoing regulatory and judicial processes, which are being addressed through established supervisory and legal frameworks.
“All banks remain fully operational, ensuring continued access to banking services for customers.”
The apex bank stressed that the exercise was executed without disrupting banking operations, ensuring uninterrupted access to services nationwide.
It further stated that key prudential indicators have improved, particularly capital adequacy ratios, which remain above global Basel benchmarks.
The minimum ratios were set at 10 per cent for regional and national banks and 15 per cent for banks with international licences.
The bank also said the recapitalisation coincided with a gradual exit from regulatory forbearance, a move it said improved asset quality, strengthened balance sheet transparency, and enhanced overall stability.
To preserve these gains, the CBN said it has reinforced its risk-based supervision framework, mandating periodic stress tests and adequate capital buffers for banks.
It added that supervisory and prudential guidelines would be reviewed regularly to strengthen governance, risk management, and resilience across the sector.
“The successful completion of the programme establishes a stronger and more resilient banking system, better positioned to support lending, mobilise savings, and withstand domestic and global shocks,” the statement said.
The Tide learnt that foreign capital inflows into Nigeria’s banking sector rose by 93.25 per cent year-on-year to $13.53bn in 2025, up from $7.00bn recorded in 2024, amid the ongoing recapitalisation drive by the Central Bank of Nigeria.
Data from the National Bureau of Statistics capital importation report showed that the banking sector remained the dominant destination for foreign capital, accounting for $13.53bn of the total $23.22bn recorded in 2025, representing 58.26 per cent of total inflows, up from 56.81 per cent in 2024.
The surge reflects heightened investor interest in Nigerian banks as they raised fresh capital to meet new regulatory thresholds introduced by the apex bank, with industry-wide recapitalisation activities driving large-scale inflows across all quarters of the year.
However, the Centre for the Promotion of Private Enterprise (CPPE) recently raised concerns over weak credit flows to small businesses despite recent banking sector reforms.
The CPPE, led by a renowned economist, Dr Muda Yusuf, acknowledged that the ongoing bank recapitalisation exercise by the CBN has strengthened the financial system, but warned that the benefits have yet to translate into meaningful support for the real economy.
The facility will be disbursed through participating Microfinance Institutions (MFIs), which will in turn extend the loans to their customers, particularly SMEs, as they directly interface with businesses at the grassroots level.
The Executive Director of COMCIN, Mr. Micheal Ogbaa who represented the Chairman, Dr. Iredele Oyedele (FCA, FCCA), said the initiative is designed to strengthen micro-lending institutions and expand access to finance for grassroots entrepreneurs, particularly women and youths in the informal sector.
Ogbaa explained that COMCIN does not lend directly to individuals but works through its network of microfinance and cooperative institutions, which in turn provide loans to end users.
“We came together to advocate for the microfinance ecosystem. Commercial banks often exclude people at the grassroots, but our members are positioned to reach them. This facility will empower them to do more,” he said.
He noted that the loan scheme offers low interest rates and flexible repayment plans, making it more accessible to small business owners.
According to him, about 90 percent of beneficiaries are expected to be women, who play a key role in sustaining families and driving economic activities at the local level.
“Our focus is on traders, service providers, and players in the informal sector. These are the real movers of the economy. By supporting them, we are strengthening families and contributing to national development,” he added.
Ogbaa disclosed that eligible SMEs with proven integrity and business track records could access up to N5 million each through participating micro-lending institutions. The rollout has commenced in Lagos and will extend to Abuja, Enugu, and other regions, including the South-West, South-East, and North-East.
He said 12 micro-lending institutions have already benefited from the scheme, while 85 applications are currently being processed under the pilot phase.
“Our target is to reach at least 100,000 SMEs nationwide. We are building a platform that connects funding partners with credible micro-lending institutions, creating a reliable channel for financial inclusion,” Ogbaa said.
He added that COMCIN is also working to attract larger funding pools from development finance institutions and private investors, noting that successful implementation of the pilot phase would boost confidence and unlock more capital for SMEs.
“We have seen encouraging testimonies from early beneficiaries. As we demonstrate transparency and efficiency, more institutions will be willing to channel funds through us,” he said.
