By Dipo Olowookere
The Central Bank of Nigeria (CBN) has been asked to look into the interest rates charged by commercial banks operating in the country so as to stimulate economy.
At the plenary chaired on Wednesday by Speaker of the House of Representatives, Mr Femi Gbajabiamila, the lawmakers said some financial institutions collect as high as 30 percent as interest rate on loans given to customers, arguing that there’s no way businesses would grow with such in practice.
This issue came yesterday at the lower chamber of the parliament when a lawmaker, Mr Fatoba Olusola, moved a motion titled Need to Investigate Banks’ Lending Practices, Protect Borrowers from Exploitative Interest Rates and Promote Economic Development
Mr Fatoba explained that he came up with this motion, which was seconded by Mr Ugonna Ozurigbo, so as to investigate the lending policies of banks and protect the borrowers from exploitative interest rates.
During the debate, the lawmaker called on the CBN to regulate the interest rates of commercial banks to encourage small and medium businesses development in Nigeria.
He also called on the banks to be sensitive to the hard-economic realities and ensure they contribute to the economic diversification and entrepreneurship drive of the government, this he stated would also ensure wealth multiplication.
Another lawmaker who made contributions to the matter, Mr Saidu Musa, called on the banks to also lend their loan services to the small and medium enterprises instead of exclusively to big-time businesses.
Other lawmakers who spoke on the issue noted that the amount charged by lenders for loans to customers has made Nigeria one of the countries with the highest lending rates in Africa, and probably the world.
They want the apex bank to look into ways to narrow the gap between the benchmark interest rate, which is the Monetary Policy Rate (MPR) currently at 13.50 percent, and the amount charged by commercial banks.
According to members of the green chamber of the National Assembly, the lending interest rates of banks restrict finance to SMEs, manufacturers and industrialists, all belonging to a sector which employs a large percentage of the workforce in Nigeria.
They said this could impede economic growth as they impact negatively on the performance of the manufacturing sector due to the difficulty of accessing loans from banks.
Cognizant that banks are the primary sources of capital for manufacturers and industrialists, the lawmakers said when lending is at a high-interest rate, profits in the manufacturing process are eroded which makes it difficult or unattractive for manufacturers to continue in business.
They want the central bank to take a cue from South Africa, Nigeria’s economic rival, which has its benchmark interest rate at a single digit of 6.50 percent.
Business Post reports that already, talks about a possible interest rate cut are in the picture in South Africa after inflation rate moderated to almost a nine-year low of 3.7 percent in October compared with 4.1 percent in September.
Back in Nigeria, according to the National Bureau of Statistics (NBS) on Monday, inflation in October rose to 11.61 percent from 11.24 percent in September as a result of closure of the country’s land borders, which pushed food inflation to 14 percent.
Modupe Gbadeyanka 
Aduragbemi Omiyale