High interest rate bane of SMEs development — Sen Oyofo

By Favour Nnabugwu

Senator Victor Oyofo has described the high interest rate charges by commercial banks as one the major hindrance to the development of the Small and Medium Enterprises, SMEs, in the country.
Oyofo who spoke at the 9th Abuja International Trade Fair  also called for ban on importation of generators noting that the importers are sabotaging the economy.

While expressing concern over the high interest rates charged by banks, he noted that a lot of small businesses have died due to the high interest charged on loans obtained by them from different banks.

“How could our economy grow when people had to pay so much interest before they could get loans from the banks in order to invest?

“ Truly many investors are scared of going to Nigerian banks to borrow money because of this high interest rate.

“This is because when they remember the huge interest that they would pay on the loan they are taking, they would be deterred to go and borrow from banks”, he said.

“ There are many things that border me on the interest charges the CBN demands from the commercial banks that collects loans from it.

“And if we are talking of industrial development in the country, we should ask ourselves how much interest rate does CBN charges before it gives loans to commercial  banks.

“I am told that CBN charges 12 per cent of interest or as high as 18 or 20 per cent of interest on the money it lends to the commercial banks.

Oyofo explained that if CBN were to charge two per cent as its interest, it would still make more money from commercial banks and many people would be willing to borrow.

He called on the governments and all the stakeholders, in the agricultural sector to intensify their focus on the sector in order to produce raw materials and food for the nation’s teeming population.

- Culled from: http://www.vanguardngr.com