Activists Laud Senate’s High Interest Rates Intervention

Two rights activists on Monday praised the senate for its plan to address the high interest rates in the country.

The activists told the News Agency of Nigeria (NAN) in Lagos that the intervention would stimulate local production and strengthen Small and Medium Enterprises (SMEs).

Senate President Bukola Saraki had on Saturday in Ilorin said that the upper legislative chamber was concerned about the high interests on loans.

He said that lawmakers would invite the Central Bank of Nigeria to discuss the issue.

Ms Sola Salako, President, Consumer Advocacy Foundation of Nigeria, said that intervention of the senate would boost businesses.

“This intervention is long over due. The interests charged by banks on loan facilities to SMEs are too high. It is a cause for concern.”

“’There is no business that can succeed if it is borrowing at 28 per cent or 29 per cent interest. It cannot work, and there cannot be growth.”

“The CBN can reduce the rate at which it lends money to banks. That is where to start.”

“If it gives banks money at one per cent interest rate, then, banks cannot charge more than 2.5 per cent.”

”If we genuinely want to stimulate business activities to generate employment and help our national economy to recover, then, people must be able to borrow money at reasonable interest rates, ” she said.

Salako also urged the senate to look into alleged excessive service charges by banks.
”They make all sorts of charges on customers.”

”It is not acceptable because the dividends they give to shareholders are almost non-existent. The senate should also look into this,” Salako said.

Mr Onyekachi Ubani, a rights campaigner and lawyer, said: ”The proposed intervention is very responsive; people have been clamouring for it, especially manufacturers.

“There is no how you can borrow at a high rate and succeed, especially in a `stiff’ environment.”
“I hope the lawmakers will drive this to a logical conclusion.”

“If it is an ordinary resolution, without any enactment to back it up or even an executive order, then, nothing has been done,” Ubani said.

NAN reports that banks currently give loans at rates ranging from 24 per cent to 28 per cent.