Business
CBN’s Interventions Drive Banks’ Credit To Private Sector Growth
Nigerian banks’ total lending to the private sector increased by 18.6 percent year/year to N34.51 trillion (USD83.1bn) in October 2021 from N29.09 trillion in the corresponding period (October 2020), data from the Central Bank of Nigeria (CBN) show.
The growth in banks’ credit to private sector of the economy was driven by the continued rollout of the CBN’s intervention schemes for specific economic sectors via banks’ balance sheets; and aggressive growth strategies employed by banks to offset the sector-wide decline in asset yields, according to EFG Hermes, Investment Banking and the leading financial partner in Frontier Emerging Markets (FEM), in its latest report.
In the nine-month period (9M) of 2021, banks’ Electronic Payment System (EPS) for four of the five Tier-1 banks (a good proxy for the entire sector) increased 11.7 percent on average as they were able to offset margin pressure by growing their loan books and increasing contributions from non-interest revenue sources (specifically e-banking revenue), the report stated.
“Robust earnings momentum should continue in Full Year (FY) 2022, as we expect strong loan growth; good Nominal Interest Rate (NIR) growth as banks continue to roll out digital banking products, and average asset yields to be higher in FY22 estimate relative to the very low base in full-year 2021 (FY21).
“With the pandemic, the adoption of digital banking channels recorded a significant rise. Even with the relaxed restriction, this trend has continued,” Victor Ndukauba, deputy managing director of Afrinvest West Africa, said while presenting the 2021 Banking sector report by Afrinvest West Africa, recently.
Total transaction volumes using digital channels more than doubled between 2018 and 2020, as volumes rose from 1.3bn to over 3.3bn financial transactions in 2020. Digital payment channels also help to support continued conduct of business activities during the lockdown.
“Our robust payment system has continued to evolve towards meeting the needs of households and businesses in Nigeria. Reflective of the confidence in our payment system, between 2015 and September 2021, about $900m has been invested in firms run by Nigerian founders,” he said.
Afrinvest report said banks’ earnings performance will remain resilient, adding that fees and commission income would cushion the impact of low yield as banks drive higher transaction volumes.
Amidst the tough macro and tight regulatory environment, Afrinvest report said banks remained resilient.
This is evident in banks delivering a 15.6 percent and 6.8 percent year/year growth in total assets and profit respectively in the first half (H1) of 2021 despite elevated Cash Reserve Ratio (CRR) debits and compulsory Loan to Deposit Ratio (LDR) levels.
With the pandemic, the Nigerian banking sector vulnerability heightened which required swift policy responses from the CBN. Consequently, the CBN rolled out stimulus packages to critical sectors with significant loan exposure, reduced interest rate on intervention facilities (from 9.0% to 5.0%), and granted banks the forbearance to restructure loan exposure. As a result, real GDP growth in the financial institutions’ sector grew by 13.3
Cornerstone of Financial Services
A survey of more than 1 000 global finance leaders undertaken by digital payment network Ripple shows that 72% of respondents believe they need to offer a digital asset solution to remain competitive.
According to Ripple, leaders from the banking, fintech, corporate and asset management sector have made it clear that the “digital asset revolution is happening now”.
“Digital assets are quickly becoming a cornerstone of financial services, underpinned by progressive regulation, growing interest from Tier-1 banks, a steady consumer shift from banks to fintech providers, and booming stablecoin adoption,” Ripple says.
The survey was conducted in early 2026 and the findings released in March.
Stablecoin Boon or Bane?
Ripple has experienced significant success in the stablecoin sector since launching its Ripple USD (RLUSD) stablecoin in 2024.
With a market cap of $1.56 billion, it is considered a major regulated player in the market.
No doubt the platform was pleased to learn through its own survey that financial leaders were most bullish about stablecoins.
Roughly three-quarters of respondents believed they could boost cash-flow efficiency and unlock trapped working capital.
Ripple noted that finance leaders were thinking about stablecoins as more than “just a new way to execute payments”; instead, they viewed them as effective tools for treasury management.
In March 2026, Ripple began testing a new trade finance model built around RLUSD in a bid to increase the speed of cross-border payments.
The pilot initiative, developed alongside supply chain finance company Unloq [https://unloq.com], is running on the XRP Ledger inside a testing framework developed by the Monetary Authority of Singapore.
The Asian city-state is one of the platform’s biggest growth markets.
The idea behind the project is to see whether stablecoin-based settlement can streamline trade finance, too often hampered by reliance on intermediaries and slow reconciliation.
The only potential drawback is that if the initiative takes off, the Ripple to USD price could be negatively affected.
Ripple has always championed its native XRP token as a bridge asset, the “middleman” in the process of a financial institution turning dollars in the US into pounds in the UK, for example.
Ripple converts dollars into XRP and then back into pounds.
If RLUSD can do exactly the same thing, questions will be asked about XRP’s relevance.
That is a bridge Ripple will have to cross if it gets to that point.
Tokenisation Partners
Another interesting finding from Ripple’s survey is that most banks and asset managers are seeking tokenisation partners to help execute their strategies.
Some 89% of respondents said digital asset storage and custody were top priority. “Token servicing/lifecycle management also ranks highly for banks at 82%, while asset managers place greater emphasis on primary distribution at 80%,” Ripple found.
The survey also revealed that just more than half of fintechs and financial institutions want an infrastructure provider that can offer a “one-stop-shop solution”. This rose to 71% among corporate financial leaders.
Ripple attributes this to institutions and firms wanting uncomplicated, cohesive systems.
Infrastructure Rules
In its final analysis, Ripple says companies across the board are looking for partners and solutions that are “secure, compliant, battle-tested and that enable growth and execution”.
“The message is clear: infrastructure decisions made today will shape competitive positioning tomorrow.”
No surprise that this is precisely where Ripple is placing much of its focus.