Why Nigerian Businesses Are Starved of Bank Loans, AfDB Reports

Business lending in Nigeria covers just 9.4% of GDP, a new AfDB report shows. Many firms still struggle to secure funding despite financial inclusion drives. The report points to low government revenue, a large informal sector and an underdeveloped banking system. Weak collateral enforcement, slow courts and strict regulations push banks toward government securities. Nigeria’s stock market capitalisation averaged only 11.8% of GDP recently. High cross-border payment costs, limited market depth and insecurity also dampen private capital inflows. To close the financing gap, AfDB recommends green bonds, public-private partnerships, blended finance and debt-for-development swaps. Stronger ties with development finance institutions can help deepen markets and fund growth.

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