Ease Credit Restrictions to Drive Growth, CPPE Tells CBN

The Centre for the Promotion of Private Enterprise has called on the Central Bank of Nigeria to adopt a more balanced policy approach, citing the challenges faced by small and medium enterprises in accessing affordable credit.

In a recent review of Governor Yemi Cardoso’s two-year tenure, CPPE’s Chief Executive Officer, Dr. Muda Yusuf, acknowledged the CBN’s progress in stabilizing the financial system and restoring credibility. However, he noted that restrictive monetary policies—such as the 27.5 percent Monetary Policy Rate and 50 percent Cash Reserve Ratio—have driven up lending costs and suppressed private sector borrowing.

Yusuf highlighted that sectors like manufacturing, agriculture, real estate, and SMEs are particularly affected by the lack of patient capital and long-term funding mechanisms. While praising reforms in foreign exchange liberalization and banking sector recapitalization, he stressed that structural financing gaps remain unresolved.

He recommended that the CBN gradually ease its policy stance as inflation moderates, and introduce credit guarantee schemes and concessionary financing programs tailored to SMEs and critical sectors. He also advocated for stronger legal frameworks to protect the autonomy of the CBN and clearer communication to guide market expectations.

According to Yusuf, the next phase of reform should focus on balancing macroeconomic stability with inclusive growth, ensuring that the financial sector becomes a true engine for national development.