Senate decries high interest rate, plans to invite CBN, Banks

High interest rate on loans obtained from banks has been described as being inimical to business development in the country if not checked by the authority, National Daily findings has revealed.

Speaking at the weekend, Senate President, Bukola Saraki said the Senate is concerned about the high interest rates on loans, stating that lawmakers will this week discuss the issue with the Central Bank of Nigeria and the Deposit Money Banks.

He stated that in an economy where workers were being retrenched and people were losing investments, it was immoral for certain sectors to be making astronomical profits.

In an interview with journalists in Ilorin, the Kwara State capital, on Sunday, the Senate President said, “They (banks) will tell you that they are doing business but in doing business, there must be social responsibility. We must be able to sit down and look at ourselves eyeball to eyeball, and we intend to do that; and I can promise Nigerians that we can find a solution. Hopefully with the stability in the forex market, we will now begin to address the high interest rate.

“There is no business that can make money if it is trying to borrow at 28 or 29 per cent. It cannot work and if we cannot get the banks to lend to the real sector and they carry on their money to government instruments, there cannot be growth. So, we must tackle that. I can assure you that I will lead that challenge. We must sit down and discuss it.”

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Saraki added, “They are in business to make money but we must look at what money is reasonable in this kind of environment. You may have to reduce that profitability to allow your country to grow. It is that balancing that we need, but in doing that, there must be some incentives. We may have to tell them, ‘Listen, we may have to limit how much you put in government security’.

“What do you do with that extra amount of money? It must go to the real sector. It must go to the business that produce made-in-Nigeria products. They may say that it is too risky to do that. In doing that, we must give them some assistance. This is the kind of negotiation we must make.”

He said the Senate would discuss with the Central Bank of Nigeria and the banks on how to address the high interest rate regime.