Manufacturers complain say banks don’t grant loan at 5% interest rate
By Jeph Ajobaju, Chief Copy Editor
Manufacturers are complaining they cannot access bank loan at 5 per cent interest rate under the Central Bank of Nigerian (CBN) intervention fund scheme for the real sector.
The more than N1 trillion fund has structural framework problems and is almost never accessed in banks at 5 per cent as they prefer to grant loans at their official market rates.
Manufacturers Association of Nigeria (MAN) Electrical/Electronic Sectoral Group Chairman Ijeoma Oduonye said efforts her company made to access the CBN fund at its designated commercial banks were not successful.
“Before now, we tried to work through one of the banks, but it didn’t materialise, now we are talking with another bank.
“It is a sector intervention fund that was going for 9 per cent before but now they brought it to 5 per cent. But we as a company have not accessed it because the commercial banks we wanted to process it in could not process it,” she said.
“I do not understand the details from their end. I don’t know the regulation between the bank and the CBN. But the bank told my firm they won’t be able to process it. Ordinarily, commercial banks would prefer you use their funds, it is at a higher interest rate.”
MAN Gas Users Sectoral Chairman and Haffar Industries Executive Director Michael Ola-Adebayo said complexities in the structural framework of the CBN fund limit access to it through banks.
“We have not been getting the loans. Has any manufacturer been borrowing this money? The commercial banks have not provided the facility to borrow money at 5 per cent, or even 10 per cent,” he lamented.
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CBN disputes claim
The CBN agreed to leave interest rate at 5 per cent per annum for critical sectors and manufacturing industries until March 2023.
This decision followed the resolution of its Monetary Policy Committee (MPC) to increase the benchmark interest rate to 13 per cent from 11.5 per cent.
CBN Corporate Communication Director Osita Nwanisobi disagreed with the position of MAN, saying more than N1 trillion has been loaned to manufacturers and others under the intervention scheme, according to reporting by The PUNCH.
His words: “I don’t know who the manufacturers are, because if we have a fund, and the payout as of today is over N1 trillion, is it not manufacturers that collected this money?
“If over N1 trillion has been disbursed, are they ghosts? It couldn’t have been a ghost. Under the Differentiated Cash Reserve Requirement, over N1 trillion has been given out. The one for manufacturers, we call it the DCCR, and it is also at 5 per cent.”
Nwanisobi insisted that if manufacturers cannot obtain funds through the scheme it is because they are not able to pitch convincing proposals on the projects funds would be used for.
“The banks would have to do due diligence on those projects. Somebody else has to carry that credit risk.”
