Private sector pushes for 5% interest rate for SMEs

The private sector players (OPS) wants five percent lending rate to small businesses to enable them unleash growth in the economy.

“Five percent interest rate would further stimulate the productive sectors of the economy, create jobs and provide new opportunities for the micro, small and medium enterprises (MSME) operators,” said Iyalode Alaba Lawson, president of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA) .

Frank Jacobs, immediate past president, Manufacturers Association of Nigeria (MAN), had earlier said that what Nigeria needs now to recover fully  is a single-digit rate of five percent.

“What we need is an interest rate of five percent. We believe that this is what can stimulate SMEs and manufacturing,” Jacobs said recently in Lagos.

Interest rates have continued to head north as the CBN retains the MPR at 14 percent.

The average borrowing rate by real sector players in 2017 was 22.8 percent,  representing 0.4 percentage point increase from 22.4 percent recorded in 2016, according to MAN.

 Tony Elumelu, founder of Tony Elumelu Foundation, recently said that every $1 spent on SMEs generates $5.

“It is important to fast-track the recapitalisation of the Bank of Industry (BoI) to enable it to meet up with huge credit demands of the industrial sector,” Jacobs had said.

“It is critical to intensify the implementation of the Moveable Collateral Registry and Credit Reporting system which were recently passed into law,” he added.

 According to him, government now needs to open up access to various development funds created by the Central Bank of Nigeria (CBN) such as the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) and the N300 billion Real Sector Support Facility (RSSF) by relaxing stringent conditions denying SMEs and manufacturers access to these funding windows.

ODINAKA ANUDU