Federal lawmakers and financial experts who converged in Abuja for the public presentation and book launch on ‘Banking reform in Nigeria: The law, the prospects and the challenges’, canvassed for low interest rates as part of efforts geared toward reflating the economy and boost employment.
Yakubu Dogara, Speaker of the House of Representatives, who delivered the keynote address at the book launch authored by Bode Ayorinde (APC-Ondo) expressed concern over the difficulties faced by Nigerians in accessing bank loans from various financial institutions operating in the country.
Dogara argued that Nigerians were discouraged in managing their businesses as a result of their inability to access loans from banks.
“I have had cause to say this before, that unless you have assets or equipments, there is no way you can take loan, or access loans from Nigerian banks to do 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 from 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.
“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,” he said.
He therefore, called on all stakeholders to join hands in ensuring improved banking institutions for better development.
“And the answer has always been that just one opinion cannot solve the issue, all hands need to work at it.
“So I believe that concerning some of these borrowing voyages such as being embarked upon recently can be avoided by applying the required formulars 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.”
One of the book reviewers, Bismark Rewane, Managing Director, Financial Derivatives, advised that interest rates should be reduced as advised by the International Monetary Fund (IMF).
He emphasised that the reduction in the rate was necessary in order to encourage small scale businesses and revive moribund industries.
In his remarks, Bode Ayorinde, Author of the Book said that the whole essence of the book “is to improve the economy by making funds available at a better pricing for the development of the economy.
“What we are saying about reforming the banking basically is to expand financial inclusion, adjust the pricing of our lending.
“Seriously, as an Author, l believe that the pricing of our lending is on the high side and is one of the major reasons for non-performing loans.
“If you look at pricing of funds in the developed nations, they are far in the single digit.
“So, it is the hope of the Author that by this book, there would be some reforms of regulation, reform in the operation and reform in practice.
“So that banking can base rates properly as a catalyst of economic development in this country,” he said.
KEHINDE AKINTOLA, Abuja
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Author: KEHINDE AKINTOLA, Abuja