FG Seeks N200bn Cooperative Bank Capital To Deepen Inclusion

By Ayo Susan

The federal government has unveiled plans to raise N200 billion in share capital for the proposed Cooperative Bank of Nigeria through the mobilisation of at least 10,000 cooperative societies nationwide. The initiative was recently announced in Kaduna during the North-West Zonal Engagement of the Ministerial Advocacy Tour on the Cooperative Bank of Nigeria Share Capital Mobilisation and Cooperative Sector Digitalisation Drive. Senator Aliyu Abdullahi, Minister of State for Agriculture and Food Security and Supervising Minister of Cooperative Affairs, said that the bank forms a central pillar of the Renewed Hope Cooperative Reform and Revamp Programme. The government simultaneously launched a Cooperative Sector Digitalisation Drive anchored on a National Cooperative Digital Architecture Platform, a National Cooperative Smart Registry, a Cooperative Verification Number (CVN) and a Cooperative Member Identification Number (CoopID) to improve transparency and access to financial services.

DECISION HIGHLIGHT

The federal government is attempting to create a member-owned financial institution backed by digital governance infrastructure, positioning cooperatives as a formal channel for capital mobilisation, financial inclusion and enterprise financing.

DECISION MEMO

The proposed Cooperative Bank is less a banking project than an effort to institutionalise cooperative finance within Nigeria’s formal financial architecture. By aggregating capital from thousands of cooperatives, the government is seeking to convert fragmented community savings structures into a scalable financing platform for agriculture, housing, transportation and small enterprise development.

Senator Abdullahi described the ambition in broad economic terms: “Through this collective effort, we aim to mobilise approximately N200 billion in share capital and establish a strong, sustainable and nationally owned cooperative financial institution capable of supporting agricultural development, enterprise growth, financial inclusion, housing, transportation, value-chain development and wealth creation for millions of Nigerians.”

The proposed ownership structure reveals the government’s attempt to balance cooperative control with external capital. According to Abdullahi, “Under the proposed ownership framework, 65 per cent of the bank’s equity shall be wholly owned and controlled by cooperative societies and cooperators,” while institutional investors, development finance institutions, development partners and qualified investors will hold 30 percent, with employees retaining five percent through an Employee Share Ownership Scheme.

The digitalisation component is equally significant. Rather than merely creating a new financial institution, the government is attempting to address longstanding governance, identity and accountability challenges within the cooperative movement. Abdullahi said the digital framework would improve transparency, eliminate ghost cooperatives and facilitate access to interventions and financial services.

He further described the initiative as transformational, stating: “The Cooperative Bank of Nigeria is more than a financial institution; it is the foundation of a broader cooperative economic ecosystem that will unlock opportunities for generations of cooperators and contribute significantly to the realisation of the Renewed Hope Agenda.”

Supporting the initiative, Murtala Dabo, Kaduna State Commissioner for Agriculture representing Governor Uba Sani, highlighted the role of financial inclusion in expanding economic participation. According to Dabo, “Over 2.5 million accounts have been opened for previously excluded citizens, while millions more have been integrated into formal economic systems through expanded identity registration and targeted empowerment programmes.”

Dabo argued that financial inclusion has become a delivery mechanism for agricultural and social interventions. “A substantial proportion of the farmers benefiting from Kaduna State’s agricultural programmes today were previously excluded from formal financial services. Through our financial inclusion drive, these farmers have been identified, profiled, banked and integrated into formal economic systems.”

Dr Mohammed Ibrahim Awwal, Provost and Chief Executive Officer of the Federal Cooperative College, Kaduna, framed both initiatives as structural reforms, noting: “Today’s engagement focuses on two transformative initiatives that have the potential to redefine the future of the cooperative movement in our country, the establishment of the Cooperative Bank of Nigeria and the Cooperative Sector Digitalisation Drive.”

Collectively, the interventions suggest a policy shift towards using cooperatives as vehicles for financial inclusion, domestic capital formation and economic formalisation.

DATA BOX

• Proposed share capital: N200bn
• Target cooperative societies: 10,000
• Equity structure:
  • 65 percent: Cooperative societies and cooperators
  • 30 percent: Institutional investors, development finance institutions, development partners and qualified investors
  • 5 percent: Employee Share Ownership Scheme
• Digitalisation tools:
  • National Cooperative Smart Registry
  • Cooperative Verification Number (CVN)
  • Cooperative Member Identification Number (CoopID)
• Kaduna financial inclusion milestone:
  • More than 2.5 million new accounts opened for previously excluded citizens
• Target beneficiaries:
  • Farmers
  • Artisans
  • Traders
  • Small businesses
  • Cooperative members

WHO WINS / WHO LOSES

Who Wins

• Cooperative societies and their members
• Farmers and agricultural value-chain participants
• Micro, small and medium-sized enterprises
• Institutional investors seeking exposure to grassroots finance
• Financial technology providers supporting cooperative digitalisation

Who Loses

• Informal financing channels facing formal competition
• Unregistered cooperatives unable to meet verification standards
• Entities benefiting from weak cooperative oversight and opaque records

POLICY SIGNALS

• Government is elevating cooperatives into mainstream economic policy.
• Financial inclusion strategy is increasingly linked to ownership and capital formation.
• Digital identity systems are becoming central to programme delivery and accountability.
• Cooperative governance reforms are emerging as a prerequisite for future intervention programmes.

INVESTOR SIGNAL

The proposed ownership structure creates an entry point for institutional investors into a potentially large cooperative finance market. If governance and digital verification systems are effectively implemented, the Cooperative Bank could become a new channel for credit expansion, rural financing and domestic capital mobilisation.

RISK RADAR

• Mobilising N200bn from cooperative societies may take longer than projected.
• Governance weaknesses that affected previous cooperative finance models could re-emerge.
• Regulatory approvals and licensing requirements may delay implementation.
• Digital adoption challenges could slow sector-wide integration.
• Balancing cooperative control with investor expectations may create governance pressures.
• Credit quality and operational risk management will be critical to long-term sustainability.