Interest rate on loan is unfriendly, senators fume; move to investigate CBN policy

THE NIGERIAN Senate on Thursday said the current interest on deposit and lending rates among commercial banks and other financial institutions in the country as stipulated by the Central Bank of Nigeria is unfriendly for business.

During the plenary, Senator representing Lagos West, Adeola Solomon Olamilekan moved a motion that there is an urgent need to reduce the gap between the lending interest rate and deposit interest rate among commercial banks and other financial institutions.
Commenting on the motion, Kano North Senator, Barau Jibrin said the CBN is ‘shortchanging Nigerians’ with its policy that interest rate should stand beyond over 14 percent.
“The content of this motion is a sad commentary on the way we run our affairs in this country. This is very bad, we have seen what is happening in developed countries where things are working well. Why should the CBN say the lending rate should be over 14 percent? We are shortchanging our businesses and citizens and this must stop. This Assembly must rise to the occasion and make sure we investigate because this is sabotage,” the Kano North senator said.
In agreement with other senators, Sabo Mohammed representing, Jigawa West said the current lending rate as stipulated by the apex bank is “killing business”.
“The only way to industrialize is to have access to infrastructure and capital. In a monopolized environment, the current lending rate is killing businesses. Unless we make the necessary corrections here, our industries would remain dead,” he noted.

Also, Senator representing Oyo North, Buhari Abdulfatai said the interest rate will hinder foreign investments in the country.
“Sometimes I wonder if our agencies are anti-people. We want investors to come into our country but we are putting interest rate at 30 percent,” Abdulfatai stated.
After contributions from other senators present at the plenary, the Senate President, Ahmad Lawan mandated the Senate Committees on Finance, Banking, Insurance, and Financial Institutions and Compliance to investigate the interest rate and report to the red chambers in two weeks.

Lukman Abolade is an Investigative reporter with The ICIR. Reach out to him via [email protected], on twitter @AboladeLAA and FB @Correction94

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