By Oluwakemi Kindness
Nigerian small businesses may continue to struggle to access formal bank credit in 2027 despite the banking sector’s ₦4.65 trillion recapitalisation.
This according to DataPro is as high Treasury bill yields and monetary policy restrictions encourage lenders to favour government securities over private-sector lending.
DataPro, in its Risk Quarterly report which examined the 2027 industry outlook following the recapitalisation of Nigerian banks said the banking sector is expected to enter 2027 structurally reinforced but facing an immediate operational reckoning.
The 2026 recapitalisation injected ₦4.65 trillion into the banking system and pushed average Capital Adequacy Ratios (CAR) to 25.5 per cent.
However, the unwinding of pandemic-era forbearance triggered an aggressive cleanup, resulting in ₦2.9 trillion in loan write-offs, which consumed 63 per cent of the newly raised capital.
DataPro said the central risk question for 2027 is no longer capital size, but capital productivity.
Despite holding ₦180 trillion in total assets, the report said real-economy lending remains constrained.
It identified a static 45 per cent Cash Reserve Ratio (CRR), combined with Treasury bill yields of about 21 per cent, as creating a “liquidity gravity” effect that steers bank capital towards risk-free sovereign paper.
The report said this has consequences for micro, small and medium enterprises (MSMEs), which represent 96 per cent of Nigerian businesses but receive less than five per cent of formal bank credit.
DataPro also identified election-year macroeconomic volatility as another challenge for the banking sector in 2027.
It said the liquidity surge of the fourth quarter of 2026 is colliding with the Central Bank of Nigeria’s recent 350-basis-point Monetary Policy Rate cut to 23 per cent.
While the rate cut signals a policy pivot, DataPro said the unchanged CRR ensures that genuine private-sector credit expansion will remain constrained until post-election uncertainties clear in early 2027.
The report said meeting minimum capital thresholds is now an entry condition rather than a differentiator for banks.
According to DataPro, the market will reward institutions that convert their expanded balance sheets into durable earnings quality.
It said success in 2027 would be measured by banks’ ability to optimise cost-to-income ratios below 50 per cent, push loan-to-deposit ratios above 65 per cent and demonstrate that post-recapitalisation credit underwriting can withstand an election cycle without generating a new wave of toxic assets.
