Banks Lending Rate Hits 29.13%

Figures obtained from the Central Bank of Nigeria on money market indicators revealed that the maximum lending rate in the banking sector hit 29.13 per cent while savings deposit rates were 4.13 per cent as of the end of December 2022.

According to the report, the prime lending rate was 13.85 per cent, while the inter-bank call rate was 12 per cent. Treasury bill rate was 4.35 per cent, one monthly deposit rate was 8.15 per cent, three months deposit rate was 3.79 per cent, six months deposit rate was 8.68 per cent, while 12 months deposit rate was 8.22 per cent.

Meanwhile, Monetary Policy Rate stood at 16.5 per cent in the period under review, however, CBN had increased it to 17.5 per cent.

The National Institute of Credit Administration stated in its report blueprint report for the growth, development and sustainability of micro, small, and medium-size enterprise sectors in Nigeria that there was a need to support businesses with single-digit loans as high-interest rates were affecting economic growth.

It stated that “The higher the Monetary Policy Rate, the higher the interest rate charged on loans and lines of credits offered to MSMEs in the country. High interest rate is an albatross to any MSME.”

NICA said many MSMEs were contending with several economic factors while running their ventures.

It stated, “Because of the scale and wherewithal of the MSMEs, these factors have significant impact on their profitability. Thus, not to further aggravate the problems, it is pertinent for MSMEs to have ‘Not too difficult’ access to single digit loans. CBN in conjunction with the developmental banks should create more sector-specific funds which MSMEs can access at single digits and without so much difficulties or strenuous conditions.”

“Federal government can jump start growth and development in the MSME sector by implementing targeted tax incentive policies.

“While this may immediately lead to reduction in revenue generation of the government particularly in this dire period of dwindling government revenue, the medium to long term benefits on the economy cannot be over-emphasised. Federal Government can give tax incentives in specific areas.”

Kehinde Ogunyale

Reporting on the data-driven economy, and investigations.

Related post