Banking
Reps Urge CBN to Regulate Commercial Banks’ Interest Rates
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.
By Modupe Gbadeyanka
To strengthen Europe-Africa trade ties, Access Bank has opened a new branch in Malta. It will focus on international trade finance, employing approximately 30 people in its initial phase, with plans for controlled expansion over time.
It was learned that this Maltese branch was established by Access Bank UK Limited, the subsidiary of Access Bank Plc, which is also the subsidiary of Access Holdings Plc, which is listed on the Nigerian Exchange (NGX) Limited.
Access Bank Malta Limited commenced operations after obtaining a banking licence from the European Central Bank (ECB) and the Malta Financial Services Authority (MFSA).
Access Bank said the licence marks a transformative milestone in bolstering Europe-Africa trade flows.
Malta, a renowned international financial centre, and a gateway between the two continents, is strategically positioned to play a pivotal role in advancing commerce and fostering economic partnerships.
This strategic expansion into Malta enables The Access Bank UK Limited to leverage growing trade opportunities between Europe and Africa.
It underscores the organisation’s commitment to driving global trade, financial integration, and supporting businesses across these regions.
“By establishing operations in Malta, we will gain a foothold in a market that bridges European and North African economies, moving us one step closer to our goal of becoming Africa’s Gateway to the World.
“It further enhances our bank’s capacity to support clients with innovative solutions tailored to cross-border trade and investment opportunities,” the chief executive of Access Bank, Mr Roosevelt Ogbonna, stated.
“Europe has emerged as Africa’s leading trading partner, driven by initiatives such as the Economic Partnership Agreements between the EU and African regions and the African Continental Free Trade Area (AfCFTA).
“With Europe-Africa economic relations entering a new phase, The Access Bank Malta Limited is ideally positioned to deepen trade and meet the financing and banking needs of our clients in these expanding markets,” the chief executive of Access Bank UK, Mr Jamie Simmonds, commented.
Also speaking, the chief executive of Access Bank Malta, Renald Theuma, said, “Malta is uniquely positioned as a bridge between Europe and Africa, making it an ideal location for our subsidiary. This move allows The Access Bank Malta Limited to engage more closely with customers in Europe and deliver tailored financial solutions that drive growth and connectivity across both continents.”
By Adedapo Adesanya
The International Finance Corporation (IFC) and Goldman Sachs have announced a new partnership with African banks, including Nigeria’s Zenith Bank and Stanbic IBTC Nigeria to support the Goldman Sachs 10,000 Women initiative, a joint programme launched in 2008 to provide access to capital and training for women entrepreneurs globally.
The two Nigerian banks are part of nine financial institutions from across Africa which have agreed to join the 10,000 Women initiative committing to leverage the business education and skills tools the programme provides to create more opportunities for women entrepreneurs across the continent by providing access to business education.
Others banks include Stanbic Bank Kenya, Ecobank Kenya, Ecobank Cote d’Ivoire, Equity Bank Group, Banco Millenium Atlantico – Angola, Baobab Group, and Orange Bank.
Speaking on this, Ms Charlotte Keenan, Managing Director at Goldman Sachs said – “10,000 Women has had a powerful impact to date, but we know that there are more women to reach and more potential to be realized.
“We are delighted to partner with IFC to supercharge the growth of women-owned businesses across Africa, and mainstream lending to female business leaders. We remain committed to supporting entrepreneurs with the access to education and capital that they need to scale.”
Since 2008, the 10,000 Women initiative has provided access to capital and business training to more than 200,000 women in 150 countries.
“This expanded initiative marks a significant step forward in creating equitable economic opportunities for women in Africa, enabling them to build stronger, more resilient businesses and to realize their entrepreneurial goals,” said Ms Nathalie Kouassi Akon, IFC’s Global Director for Gender and Economic Inclusion.
Goldman Sachs’ 10,000 Women initiative complements the Women Entrepreneurs Opportunity Facility (WEOF), launched in 2014 by Goldman Sachs and IFC as the first-of-its-kind global facility dedicated to expanding access to capital for women entrepreneurs in emerging markets.
By Aduragbemi Omiyale
In recognition of its unwavering commitment to fostering access to financing for Nigerian micro, small and medium enterprises (MSMEs), Development Bank of Nigeria Plc has been rewarded with the Financial Inclusion Leadership Award at the Champions of Inclusion Nigeria Financial Inclusion Awards.
This was at the 2024 International Financial Inclusion Conference (IFIC) organised by the Central Bank of Nigeria (CBN) in collaboration with the World Bank and other stakeholders.
The chief executive of the lender, Mr Tony Okpanachi, said the recognition affirms the company’s efforts in expanding access to financial services for MSMEs in Nigeria.
“We are honoured to receive the Financial Inclusion Leadership Award, which is a testament to our bank’s commitment to expanding access to financial services for all Nigerians. This award recognises our efforts to bridge the financial inclusion gap, particularly for a priority sector like the MSMEs.
“Additionally, this award is a validation of our strategic focus on driving financial inclusion for small businesses, and we are proud to be at the forefront of this initiative that drives that. We will continue to innovate and expand our financial inclusion programmes, ensuring that more Nigerian small and startup businesses have access to services,” he stated.
On his part, the Chief Operating Officer of DBN, Mr Bonaventure Okhaimo, said the accolade demonstrates the firm’s dedication to driving financial inclusion and economic growth in Nigeria.
“This award acknowledges our Bank’s innovative approach to widening opportunities for MSMEs in Nigeria to grow and scale their businesses,” he said.
“This award will motivate us to continue pushing the boundaries of financial inclusion, exploring more innovative solutions and partnerships to expand our reach and impact.
“We are committed to ensuring that more small businesses and startup enterprises in Nigeria have access to financial services, this award will further inspire us to accelerate our efforts in this regard,” he stated.
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