\u201cEven today, as I\u2019m talking to you, the interest rate is not lower for manufacturers. It is even higher than it was before the capitalisation,\u201d he said.<\/p>\n
According to him, the cost of credit puts Nigerian manufacturers at a disadvantage against competitors in countries such as China, where some producers can access loans at interest rates as low as three per cent.\n<\/p>\n
\u201cIf the Chinese are coming and succeeding, why can\u2019t the Nigerian manufacturers succeed?\u201d Okoye asked.\n<\/p>\n
He said banks had not significantly reduced their lending rates to manufacturers, despite the recapitalisation of the sector.\n<\/p>\n
\u201cThe banks won\u2019t come to you to tell you the rate is supposed to be lower now. They say they want to do you a favour. If were giving you 30 per cent, we will give you now 29 per cent,\u201d he said.\n<\/p>\n
Okoye argued that affordable financing was necessary for manufacturers to expand production, create jobs and provide a reliable market for agricultural produce.<\/p>\n
\u201cThe manufacturers are ready to contribute if they have been given the finance,\u201d he said, urging policymakers and financial institutions to ensure that reductions in the monetary policy rate translate into lower commercial lending rates.\n<\/p>\n
Read also:\u00a0Why manufacturers must move beyond AI experimentation to deliver measurable economic value<\/a><\/strong>\n<\/p>\n The concerns over the cost and accessibility of credit were echoed by Charles Odii, director-general of the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), who said stringent lending conditions were preventing many small businesses from accessing available funds.\n<\/p>\n Odii disclosed that SMEDAN had placed about N600 million with Jaiz Bank for small business financing, but only 12 entrepreneurs were able to access the fund.\n<\/p>\n \u201cIt was Jais Bank to be precise. And to my surprise, it was only 12 entrepreneurs that were able to access that fund,\u201d he said.<\/p>\n He explained that the arrangement required the bank to bear the lending risk and repay the money, leading to stringent conditions that limited access for small businesses.\n<\/p>\n Odii said banks needed to adopt lending models that reflected how small businesses operate, rather than applying the same requirements used for large manufacturers.\n<\/p>\n \u201cThe way a large manufacturer will access money from a commercial bank will be very different from the way a small business will access money,\u201d he said.\n<\/p>\n He urged commercial banks to consider transaction-based lending, using businesses\u2019 daily turnover and cash flow to assess their capacity to repay loans.\n<\/p>\n Read also:\u00a0Nigeria manufacturers urge system reforms to halt factory closures<\/a><\/strong><\/p>\n \u201cFor our small businesses, we are appealing to First Bank and the likes to look at the transactional system where you can see how much this small business is doing on a daily basis.\n<\/p>\n \u201cIf First Bank can start to look at lending from that perspective, or the commercial banks can start to look at lending from that perspective, our small business will have a lot of access to credits,\u201d he noted\n<\/p>\n Odii said some small businesses generated substantial revenue but still struggled with short-term financing gaps while waiting for customers to settle invoices.\n<\/p>\n He gave the example of a business with monthly turnover of about N5 billion that needed financing to bridge the period between delivering goods or services and receiving payment.\n<\/p>\n SMEDAN has also worked with MoneyPoint to support small business financing, as part of efforts to improve access to credit for enterprises that often lack the collateral and formal records required by conventional lenders.<\/p>\n Odii said the agency had spoken to about two million businesses out of Nigeria\u2019s estimated 39,654,385 nano, micro, small and medium enterprises. The feedback identified four major constraints: people, power, infrastructure and financing.\n<\/p>\n Beyond access to finance, he said SMEDAN was testing shared industrial facilities to help small businesses overcome the cost of acquiring and maintaining equipment.\n<\/p>\n Read also:\u00a0Manufacturers decry high cost of energy<\/strong><\/a>\n<\/p>\n At its Abuja office, the agency has established a facility equipped with power and about 200 sewing machines, allowing entrepreneurs to produce garments without individually investing in machinery.\n<\/p>\n \u201cWhat I\u2019m wearing right now is made in that factory,\u201d he said.<\/p>\n The agency is also building an Abuja Centre for Entrepreneurship with support from the Korean government and revamping its entrepreneurship curriculum in partnership with the German government.\n<\/p>\n Odii said SMEDAN remained open to partnerships that could address the challenges facing small businesses, reduce unemployment and create sustainable jobs.<\/p>\n Source: <\/p>\n Nigerian manufacturers are still borrowing at interest rates of about 30 per cent despite the banking sector recapitalisation exercise, raising concerns that the reforms have yet to translate into cheaper… <\/p>\n","protected":false},"author":1,"featured_media":2335,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-2334","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business"],"_links":{"self":[{"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/posts\/2334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/comments?post=2334"}],"version-history":[{"count":0,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/posts\/2334\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/media\/2335"}],"wp:attachment":[{"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/media?parent=2334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/categories?post=2334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/globalnigerianews.com\/index.php\/wp-json\/wp\/v2\/tags?post=2334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Related News<\/h4>\n<\/p><\/div>\n
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