“Businesses Will Suffer”: Nigerian Bank MD Calls Out CBN over High Interest Rates
- The MD/CEO of Fidelity Bank, Nneka Onyeali-Ikpe, has decried CBN’s high interest rates
- She disclosed at a recent event in Abuja that medium and small businesses cannot survive doing business with the current interest rate
- She asked the Nigerian government to establish a particular bank for SMEs to allow access to funding easily
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The managing director/Chief Executive Officer of Fidelity Bank Plc, Nneka Onyeali-Ikpe, said that Micro, Small and Medium Enterprises (MSMEs) can't survive doing business in Nigeria by borrowing at the current interest rates.
Onyeali-Ikpe disclosed this while delivering a keynote address at the 5th DBN annual lecture in Abuja on Wednesday, September 25, 2024.
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Nigeria needs a particular bank for small businesses
The Fidelity Bank’s boss statement comes as the Central Bank of Nigeria (CBN) Monetary Policy Committee (MPC) increased Nigeria’s interest rate by 50 basis points to 27.25% from 26.75%.
According to her, Nigeria needs to establish an SME bank. She also said the country needs more developmental financial institutions like DBN, Bank of Industry, and Bank of Agriculture to ensure the agencies are well-handled. SMEs cannot do business, which will affect GDP growth.
He said:
“The commercial rates can only be used for things like trade-in, but anything long-term cannot be done on the commercial rates. So, we must pay attention to this.”
She disclosed that SMEs account for over 50% of industrial employment and contribute 40% to the country’s GDP.
80% of Nigerian businesses die annually due to funding
Daily Trust reports that the top banker said the MSMEs are threatened, and the failure rate is very high in Nigeria, as about 80% of the small businesses in Nigeria failed within the first five years of operations.
A report by PwC said there is a funding gap of $2 billion for SMEs in Nigeria.
DBN disburses N789 billion to small businesses
The Fidelity Bank boss called on the government to address taxation issues, saying that multiple taxes SMEs pay is a significant hurdle, with some contending with about 10 or 20 agencies regularly.
DBN’s Managing Director, Tony Okpanachi, said the bank has disbursed N786 billion in loans to almost 500,000 MSMEs nationwide.
Okpanachi disclosed that Nigeria could enable MSMEs to grow and prosper by establishing loan schemes, allocating funds for startups, and investing in critical infrastructure.
CBN, Access, Zenith, UBA, and others sell $9.9bn
Legit.ng earlier reported that the volume of FX turnover through the Nigerian Autonomous Foreign Exchange Market (NAFEM) rose to N15 trillion in August 2024.
The development came as the Central Bank of Nigeria (CBN) disclosed that foreign inflow into Nigeria in the same period increased to $585 million in August.
On Tuesday, September 24, 2024, the naira depreciated against the dollar from N1,659 to N1,658 per dollar in the official market, while the parallel market dealers sold the US greenback at N1,670 per dollar.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
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