The Central Bank of Nigeria’s monetary policy of high-interest rates to commercial banks has been listed as part of the reasons Small and Medium Enterprises are not growing.
Edo State Commissioner for Wealth Creation, Cooperatives and Employment, Emmanuel Usoh, made this remark at the 17th Micro, Small and Medium Enterprises (MSMEs) International Summit and Exhibition organized by the Nigerian Association of Small and Medium Enterprises (NASME) in Benin-City.
He noted that the apex bank’s monetary policy still pegs interest rates to commercial banks at between 20 and 25 per cent, which he said has made it difficult for SMEs to have access to loans from the commercial banks.
He also noted that the commercial banks’ interest rates are laced with cumbersome collateral which has not helped the growth of small businesses in the country.
“The monetary policy of the Central Bank of Nigeria is not cascading down to commercial banks where interest rates still range between 20 per cent and 25 per cent for commercial banks,” he said.
Usoh listed other challenges inhibiting the growth of SMEs in the country to include corruption, huge infrastructure deficits, lack of capacity building for the small business owners, institutional and public reforms.
The Commissioner noted that the enabling environment would be created for small businesses to thrive in the country, only through adequate institutional and infrastructural reforms.