Nigeria’s Banks of Industry has revealed that it is seeking to raise N1 trillion ($3.1 billion) over the next two years to grow cheap lending to the country’s vibrant SME sector.
Africa’s largest economy, Nigeria, is home to one of the continent’s most attractive SME markets. It houses over 30 million micro, small and medium-sized businesses. However, many struggle to expand beyond such confines as the cost of fund continues to prove a major bottleneck.
“At a high-interest rate of between 30 to 35percent, what sort of businesses can you do with that? This is why small and medium businesses can’t survive” Managing Director of BOI, Mr Olukayode Pitan, disclosed while in a meeting with a delegation from Ebonyi State, led by the State Governor.
He explained that for the Bank to effectively reduce the cost of borrowing for smaller businesses, it became necessary for the bank to raise additional funds that will go into loans offered at single digit interest rates.
“We have to step in fast. We are crying to the government to raise between N500 billion and N1 trillion between now and next two years so that we can support the industry and businesses can borrow at less than 10 percent,” said BOI MD.
The Bank of Industry is already locked in discussions with 20 other State Governments regarding measures and strategies it could deploy towards making cheap funds available for local SMEs.