Five Years of FUGAZ Lending: How Tier-1 Banks Backed Manufacturers

Nigeria’s biggest lenders—First HoldCo, United Bank for Africa (UBA), Guaranty Trust Holding Company (GTCO), Access Holdings, and Zenith Bank, collectively known as FUGAZ—significantly expanded credit to the manufacturing sector between 2021 and 2025, making it one of the most important destinations for bank lending outside the oil and gas industry. 

However, a closer look at the banks’ loan books shows that while manufacturing remained a strategic sector, it was rarely the largest recipient of credit.

Oil and gas, general commerce, and public sector lending continued to command larger allocations across most of the banking groups, highlighting the challenge manufacturers face in securing affordable financing despite repeated calls for industrialisation and economic diversification.

The trend comes as manufacturers continue to seek cheaper and longer-term financing to support production.

Pinnacle Daily reports that the Manufacturers Association of Nigeria (MAN) had called for the creation of a Manufacturing Refinancing and Rediscounting Facility (MRRF) that would enable banks to refinance approved manufacturing loans at single-digit interest rates for up to seven years.

The association is also seeking further reductions in benchmark interest rates, approval of a proposed N1 trillion stabilisation fund for manufacturers, increased capitalisation of the Bank of Industry (BOI), transparent tracking of lending flows and interest rates, implementation of the Nigeria Industrial Policy, and lower gas costs through the classification of manufacturers as strategic gas users.

Manufacturing Emerges as a Core Lending Destination

Between 2021 and 2025, all five Tier-1 banks increased their exposure to manufacturing, although at different speeds and with varying levels of commitment, Pinnacle Daily analysis of banks’ financial results shows.

Zenith Bank remained the largest lender to manufacturers for most of the period, as manufacturing loans rose from N821.6 billion in 2021 to a peak of N2.65 trillion in 2024 before moderating to N1.46 trillion in 2025.

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Even after the decline, Zenith maintained one of the largest manufacturing portfolios in the banking industry.

Access Holdings recorded the most aggressive expansion as manufacturing loans grew from N236.1 billion in 2021 to N1.32 trillion in 2025, representing nearly a sixfold increase.

The sharp rise reflects a deliberate strategy to position the bank as a major financier of industrial activity and economic diversification.

First HoldCo also substantially increased lending to manufacturers, as its exposure climbed from N251.5 billion in 2021 to N867.4 billion in 2025, although the sector’s share of the bank’s overall loan book declined in the latter years as lending to oil and gas and the public sector accelerated.

UBA recorded one of the most consistent growth trajectories, as manufacturing loans expanded from N191.9 billion in 2021 to N742.9 billion in 2025.

The bank’s strategy was reinforced by its $6 billion commitment under the African Continental Free Trade Area (AfCFTA) framework to support sectors such as agro-processing, pharmaceuticals, and automotive manufacturing.

GTCO adopted the most conservative approach among the FUGAZ banks, as manufacturing lending increased from N273.9 billion in 2021 to N373.5 billion in 2025.

While growth was modest compared with peers, the bank maintained steady support for key industrial and agribusiness players.

Collectively, the data show that manufacturing remained a preferred destination for real-sector lending. However, the extent of support varied significantly across institutions.

Which Bank Prioritised Manufacturing the Most?

A clearer picture emerges when manufacturing loans are measured as a percentage of total lending rather than by absolute value.

By 2025, Access Holdings had become the most manufacturing-focused of the five banks, as manufacturing accounted for 30.6 per cent of its total loan book, up from about 13 per cent in 2021.

This means nearly one-third of all loans issued by the bank were directed to manufacturing businesses, making it the strongest supporter of the sector relative to its overall lending activities.

Zenith Bank ranked second, with manufacturing accounting for 13.2 per cent of total loans in 2025. Although lower than its 24.1 per cent share in 2024 and 30.4 per cent in 2022, the bank still maintained one of the largest manufacturing portfolios in absolute terms.

GTCO ranked third at 11.9 per cent, reflecting a stable but measured commitment to the sector throughout the review period.

First HoldCo followed with 9.9 per cent of total lending allocated to manufacturing in 2025, down significantly from more than 20 per cent between 2021 and 2023.

UBA ranked fifth at 9.8 per cent, though it recorded steady year-on-year improvements throughout the period.

Based on lending concentration in 2025, the ranking of the banks’ commitment to manufacturing was Access Holdings, Zenith Bank, GTCO, First HoldCo, and UBA.

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The figures suggest that while Zenith remained the dominant lender by volume, Access Holdings devoted the largest share of its balance sheet to manufacturing and therefore emerged as the bank with the strongest relative commitment to the sector.

Manufacturing Still Trails Oil and Gas, Commerce

Despite the expansion in manufacturing credit, the sector remained behind oil and gas and, in some cases, general commerce in attracting bank funding.

Oil and gas emerged as the largest recipient of lending across the banking industry. By 2025, First HoldCo had exposure of N3.19 trillion to the sector, while Zenith and Access each carried oil and gas portfolios exceeding N2.5 trillion. GTCO’s largest non-individual lending exposure also remained oil and gas at N1.08 trillion.

General commerce also attracted substantial credit, with Zenith’s lending to the sector reaching N3.25 trillion in 2025, making it the bank’s single largest lending category. Access similarly recorded over N1 trillion in commerce-related lending.

Manufacturing, therefore, occupied a middle position within the lending hierarchy. It received far more support than many sectors and was consistently identified as a strategic growth area, but it did not displace oil and gas as the dominant destination for bank credit.

Agriculture followed a similar pattern. Although lending volumes were lower than manufacturing, the sector recorded some of the fastest growth rates, particularly at Access Holdings, where agricultural loans surged from N43.3 billion in 2021 to N699.1 billion in 2025.

CBN Data Reveal Growing Pressure on Manufacturers

The increase in bank lending over the past five years has not insulated manufacturers from financing challenges.

Recent data from the Central Bank of Nigeria (CBN) show that outstanding credit to manufacturers declined by N1.44 trillion between December 2024 and September 2025.

Sectoral credit fell from N8.53 trillion to N7.09 trillion during the period as lending rates climbed above 30 per cent and tight monetary conditions weakened investment appetite.

The decline points to a growing disconnect between banks’ willingness to maintain manufacturing portfolios and manufacturers’ ability to borrow under prevailing market conditions. It also suggests that many firms are reducing leverage and postponing expansion plans amid elevated borrowing costs.

The trend reinforces MAN’s argument that affordable and long-term financing has become critical for the survival and competitiveness of local industries.

National President of the Association of Micro Entrepreneurs of Nigeria (AMEN), Saviour Iche, expressed scepticism that the successful bank recapitalisation exercise would significantly improve access to finance for small businesses and manufacturers, arguing that lenders have historically prioritised their own interests over those of entrepreneurs.

“Even with all the money that banks are raising, Nigerian banks cannot be trusted,” he told Pinnacle Daily. “They are only there for their own interests. They are not there for the interests of SMEs.”

According to him, the challenge facing local manufacturers is not necessarily the size of banks’ capital bases but their willingness to provide affordable and accessible financing to productive enterprises.

“Even if there is money, what percentage are they going to give to people who want to grow their businesses?” he asked.
Iche said many micro-entrepreneurs and small business owners prefer seeking financial support from friends, family members, and customers rather than approaching banks because of the difficulties associated with obtaining and repaying loans.

“Most times, we micro-entrepreneurs and small businesses prefer seeking money from friends and families, even from our customers, before going to a bank,” he said.

He also criticised what he described as hidden charges attached to bank loans, claiming that borrowers are often not fully informed about the total cost of facilities until after agreements have been signed.

“There are some hidden things, hidden charges they will not tell you first,” he said. “It is after you have signed that you start hearing this and that.”

According to him, additional charges such as insurance and other fees can significantly increase the cost of borrowing and reduce the actual amount available to businesses.

Iche further argued that recapitalisation alone would not solve the financing challenges facing small businesses unless banks change their lending approach.

“You cannot wait until you have much before you start giving,” he said. “If they were willing to support businesses, they would have done so with what they already had.”

He also expressed reservations about the accessibility of financing from the Bank of Industry, saying many small businesses struggle to access its facilities.

“A small business cannot get money there easily,” he said.

According to Iche, the institution primarily finances machinery and chemicals rather than providing the working capital that many local SMEs require to sustain their operations.

Drawing from his personal experience, he said banks often require extensive collateral before approving loans and subsequently impose additional charges that increase the overall cost of borrowing.

“At the end, they asked me to bring my car documents, original documents, and a landed property,” he added. “After they give the money and start telling you about burglary and insurance fees, the cost of the facility increases.”