Banking Reform: Dogara calls for review of interest rates
How banking practices stifle business growth in Nigeria – Speaker Dogara
Speaker of the House of Representatives, Hon. Yakubu Dogara, has called for action to be taken concerning prevalent banking practices which have adverse effects on business growth and entrepreneurship in Nigeria.
Speaking at the launch of a book on banking reforms by a member of the House of Representatives Dr. Bode Ayorinde, representing Owo/Ose Federal Constituency, Dogara highlighted issues such as high lending rates and difficulties in accessing loans; and compared prevalent practices in the country with what is obtainable in other climes.
“The challenge in the banking industry in Nigeria is such that it is organized in such a way that it creates buoyancy and development in other jurisdictions, not in Nigeria. I have had cause to say this before, that unless you have assets or equipment, there is no way you can take loans or access loans from Nigerian banks to do the business. If you are not careful in taking loans from Nigerian banks, one will just end up in the poverty gap.”
“I don’t think our citizens are supposed to do their businesses with money they already have in their pockets. Businesses elsewhere are executed by loans by the banking industry in those countries. I don’t know why the interest rate in Nigeria is so high. What is it that we can do to lower the cost of funds in Nigeria, so that our young men, women and entrepreneurs can risk taking money from our financial institutions in order to realize their dreams?”
He queried the likelihood of success of business reforms in the country, in light of the fact that loans remain largely inaccessible to those who most require such financial aids to grow their businesses.
“I love the fact that the Vice President is chairing the council on the ease of doing business in Nigeria but in dealing with most businesses, you are forced to ask what business are we doing? How do we fund these businesses?”
The Speaker, who lamented that the political will to tackle the challenge has been lacking, called on all stakeholders to work together to strengthen the various institutions within the country in line with international best practices.
“That has been the challenge, from the point of view of the Executive down to the Parliament, the political will to address this has not been there. And the answer has always been that just one opinion cannot solve the issue, all hands need to work at it. We cannot afford to continue having weak institutions in Nigeria, not after so many years of having balance.”
“So I believe that concerning some of these borrowing voyages such as been embarked upon recently can be avoided by applying the required formulas that work even here in Nigeria. The sharp parallel that is drawn between the practice here in Nigeria and the practices in over 20 other jurisdictions of the world.”
The event also had in attendance the Vice President, Professor Yemi Osinbajo and the governor of Ondo State, Rotimi Akeredolu.