Address low credit-to-GDP ratio, ex-CBN official tasks banks

Former Deputy Governor of the Central Bank of Nigeria, Dr Sarah Alade, has called on Nigerian banks to address the nation’s low credit-to-GDP ratio and the increasing threat of digital fraud.

According to a statement from the Chartered Institute of Bankers of Nigeria on Monday, Alade made this call during her keynote address at the annual Induction and Prize Awards ceremony held on Saturday.

The credit-to-GDP ratio indicates the amount of domestic credit extended to the private sector as a percentage of the country’s Gross Domestic Product, reflecting the financial sector’s role in supporting economic activity.

Alade traced Nigeria’s financial sector evolution from its fragmented state in the early 2000s to its current position as a continental leader, crediting reforms like Basel compliance and digital transformation.

“However, she identified persistent challenges, including Nigeria’s 21 per cent credit-to-GDP ratio (versus 70 per cent in South Africa), urging banks to expand lending to priority sectors through innovative risk frameworks,” part of the statement read.

The banking veteran went on to outline four strategic imperatives to include technology adoption to accelerate integration of AI, blockchain and fintech partnerships; sustainable finance; mainstream ESG principles in lending decisions; cyber resilience; combat rising digital fraud; and policy collaboration to strengthen regulator-industry coordination.

Alade charged the newly inducted members of CIBN with transformative leadership rather than taking on routine banking practices.

She framed the induction as the start of an elevated professional journey, challenging attendees to evolve from practitioners to transformative leaders. “This ceremony opens doors to greater responsibilities. Will you settle for routine banking or redefine industry standards?” she asked the inductees.

In his comments, the CIBN President, Prof. Pius Olanrewaju, reiterated the call for the adoption of technology to boost the turnover of banks.

Olanrewaju cited data that show digitally progressive banks achieve 3.5 times higher revenue growth and also referenced the Edelman Trust Barometer, which indicates that ethical institutions enjoy 26 per cent greater customer confidence.

He went on to charge members to operationalise the CIBN’s LEGACY Agenda, emphasising that “Nigeria’s banking future will be written by those who combine technical excellence with transformative vision.”

The newly inducted members spanned various categories, including 803 regular chartered bankers, 383 MCIB members, 53 SMP/AMP professionals, 27 MSc pathway members, and four chartered banker/MBA candidates.

The induction also included international professionals from Sierra Leone, The Gambia, Kenya, Cameroon, Rwanda, and Ghana.