CBN Reforms: FX Stabilises, SME Credit Rises to N199bn
By Patience Ikpeme
The Central Bank of Nigeria (CBN) has disclosed that new credit to Small and Medium Enterprises (SMEs) rose to about N199 billion in April 2026, up from N153 billion in March 2026.
The data shows that lending remains heavily focused on the retail end, with the general category accounting for 94.73% of new credit facilities, while general commerce accounted for 2.46%.
Cardoso admitted that high benchmark interest rates have constrained credit to SMEs, but pointed out that commercial banks may now be diversifying away from large-ticket lending toward smaller businesses. He added that SME financing is not the exclusive responsibility of the CBN but requires collaboration with other arms of government, including the Ministry of Industry, Trade and Investment, the Bank of Industry (BOI), and fiscal authorities.
“In the case of central bank, as increasingly we see ourselves as a catalyst, and we use our convening power, and we use some of the tools at our disposal to ensure that we make it more palatable for those who previously may have shied away from dealing with SMEs to want to get encouraged to do so,” Cardoso explained.
To further remove bottlenecks affecting SMEs, the CBN recently signed a Memorandum of Understanding (MOU) with the Nigerian Communications Commission (NCC) to tackle fraud and connectivity issues. Other interventions include the Global Standing Instruction (GSI) framework, which helps creditor institutions recover funds from defaulting debtors’ balances across the banking system, and an upward review of the single obligor limit for Development Finance Institutions (DFIs) to expand their lending capacity. The apex bank is also encouraging foreign DFIs to play a bigger role in the sector.
Cardoso strongly disputed claims that the apex bank is draining the nation’s foreign reserves to prop up the local currency, revealing that the foreign exchange system has transformed significantly under current reforms.
Addressing journalists at the post-Monetary Policy Committee (MPC) briefing, the CBN Governor, Olayemi Cardoso, clarified that the market is now driven by willing buyer-willing seller dynamics, which naturally reduces the need for direct intervention.
“When we came, this administration took over, we roughly had foreign exchange turnover on a daily basis of about 100 million US. As of today, it’s roughly about 550 million US. And at times, it has spiked as high as $1 billion on a daily basis,” Cardoso said. He noted that the apex bank hopes daily turnover will consistently reach the $1 billion mark in the future.
According to the Governor, a deeper and more liquid FX market creates an environment where liquidity rules the day, making aggressive intervention unnecessary. Data from the apex bank shows that CBN interventions accounted for a mere 1.2% to 1.3% of total market turnover in 2025.
Cardoso identified transparency and equal access to information as the key drivers of this newfound market stability. While acknowledging that some FX payments are still made from the reserves to meet government obligations and outstanding loan repayments, he stated that inflows continue to replenish the reserves as outflows occur. Nigeria’s foreign reserves have already recovered to levels seen before the Iran war-related disruptions, and the Governor expressed confidence that reserves would continue improving over time.
Addressing rising consumer complaints over bank charges, Cardoso cleared the commercial banks of blame regarding the daily N50 stamp duty alerts. He explained that the stamp duty is not an outcome of the banking system but emanates directly from the tax authorities, with banks only acting as collection agents.
Customers aggrieved by arbitrary charges were advised to first approach their banks, with the CBN’s Consumer Protection Department serving as the escalation point for unresolved cases. To address these issues systematically, a CBN-led committee meets quarterly with consumer experience executives from deposit money banks and the top ten microfinance banks.
The Governor specifically noted that the multiplicity of transaction alerts sent by banks creates confusion for customers. To fix this, the CBN is considering ways to consolidate transaction alerts for greater clarity. Furthermore, the CBN’s compliance department is continuously reviewing how commercial banks handle customer complaints and compensation processes.
To lock in market transparency, the CBN announced that a newly revised Foreign Exchange Manual will take effect from June 1. This marks the first major revision of the document since 2017. The manual will be available on the CBN website for free, and physical copies will also be distributed free of charge to ensure no information is hidden from stakeholders.
The new manual is expected to provide easier, more flexible access to foreign exchange, encouraging exporters who previously diverted export proceeds abroad to bring their FX back into the Nigerian system. Cardoso noted that these reforms are already yielding practical benefits, as Nigerians can now use their naira cards for international transactions without frontloading accounts.
Reflecting on broader macroeconomic trends, Cardoso recalled that Nigeria recorded 11 straight months of disinflation before recent external shocks triggered fresh inflationary pressures. The CBN views the current inflationary pressure as temporary and believes the buffers created through its reforms have insulated the economy.
He pointed to the recent upgrade by Standard & Poor’s (S&P) as evidence that the bank’s policies are moving in the right direction, stating that the CBN will sustain its current course to maintain the fight against inflation. Exchange rate stability remains the centerpiece of the CBN’s policy toolkit, and the bank is strengthening its collaboration with fiscal authorities to reduce inflation pass-through effects.
Finally, the Governor gave updates on the banking sector recapitalisation programme, which was recently commended by the International Monetary Fund (IMF). The exercise saw 33 banks successfully meet the new capital thresholds, a feat Cardoso described as a relatively seamless process that reflects massive investor confidence in the economy. Domestically, the investment ratio stood at about 74% domestic to 26% foreign investors.
For the banks yet to meet the threshold, Cardoso explained that they are currently resolving various legal, regulatory, and judicial challenges. He noted that it would be unfair to compare their timing with other institutions, as past CBN regulatory interventions had taken away some of their compliance time. However, the apex bank stated it remains fully on top of the situation, adding that banking operations in the affected institutions continue as normal while the CBN supports their efforts to resolve outstanding regulatory impediments.
