The Chairman, House of Representatives Committee on Banking and Currency, Hon. Chukwudi Jones Onyereri, has expressed displeasure over what he described as an abysmal high interest rates on loans granted by the Nigerian Export-Import Bank (NEXIM) to Micro Small and Medium Enterprises (MSMEs).

He was particularly concerned that the development finance institution, which was created to boost non-oil exports by giving loans at low commercial rates to domestic entrepreneurs currently charges up to 16 per cent on the loans- almost at par with commercial bank rates.

Speaking during the 2018 budget defence session with top management of the bank, Onyereri said the development was unacceptable.

But the Managing Director of NEXIM Bank, Mr. Abubakar Abba Bello, tried to justify the rates, stressing that the bank might not be able to meet its overheads should the interest on loans drop below 16 percent.

Unimpressed by the explanation, Onyereri said: “I think it’s absolutely wrong, by my assumption, you are trying to use interest rates to cover your gaps.

“The truth of the matter is that what you should do is to go and recover loans that you’ve already given out not using interest rates at the detriment of the MSMEs you are meant to help.”

He said: “It’s actually wrong and that’s what we’ve been fighting in this country; its not really acceptable. I’m a little bit worried by what I’ve seen here; your lending rates.

“The whole idea of BoI, BOA, Development Bank and NEXIM is to help MSMEs and also help them to build their businesses while you are adding to national economic outlook.”

Bello, had told the committee: “We have to calculate our revenues based on the 16 per cent because they are already running loans but the new loans we are booking will go for nine percent.

“And as we recover those that are already on our balance sheet and booking them again, they’ll go at nine percent.

“But despite the fact that we are not a profit making organisation, in the real sense, we are not driven by profit, we have a responsibility to ensure that the organisation remains profitable because that’s the only way we can sustain it.

“So, at some point, during the life of this bank, if we go below 16 percent, we won’t be able to even cover our overheads, – and that’s why loans were booked at 16 percent which is about half of what commercial banks are doing for small and medium enterprises.”

However, Onyereri said: “From what I’ve seen, it’s worrisome because there’s really no difference between Commercial Banks and the DMBs. With your rates at 16 per cent, that’s really unacceptable.”

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