CBN assures that new lower denomination currencies would soon be in circulation for easier transactions.
The Bankers Committee of the Central Bank of Nigeria, CBN, on Tuesday said it is considering the introduction of a special interest rate regime on credit to enhance the productive capacities of Small and Medium Enterprises (SMEs) in the country.
The Managing Director of Diamond Bank Plc, Alex Otti, told reporters at the end of the Bankers Committee meeting in Abuja that the proposed plan to provide micro enterprises access to bank credits at lower interest rates was part of decisions reached during the meeting.
Mr. Otti said members were convinced that the move would help in redressing the constraints against optimal performance of these enterprises to create more jobs with the attendant multiplier effects on the economy.
This is coming even as the Central Bank assured that new lower denomination currencies would soon be in circulation for easier transactions in response to series of complaints by bank customers and other stakeholders over problems associated with mutilated currencies for transactions.
According to Mr. Otti, the modalities for the proposed lower interest rate regime for the SMEs were being fine-tuned by the Committee, pointing out that the new interest rates would become operational within the next few weeks.
“We held extensive discussions on how banks can begin to support the real sector, the retail sector of the market, the micro, medium and small scale industries,” he said. “We underscored the need for banks to support those areas of the economy that have hitherto not benefited as much as others sectors for the simple reason that it would help to reduce social tension and by generating a lot of employment and empowering a lot of people in the economy.
“The bankers also discussed ways and means of reducing interest rate to this sector of the economy, which we believe is the life-wire of the economy. Further discussions are ongoing to see how we can collectively make lending cheaper or lower in the industry so that we can encourage the micro, medium and small scale industries to thrive and generate employment, reduce inflation, reduce social tension and increase productivity generally in the country,” Mr. Otti added.
On the issue of the mutilated bank notes, the CBN’s Director of Banking Supervision, Tokunbo Martins, said the bank was already aware of the problem and was working on plans to get new notes into the system within the next few weeks, even as she refuted reports that coins had been officially withdrawn from circulation.
The Managing Director of Citibank, Omar Hafiz, also spoke on the discussions of the committee as they affected the ongoing structural reforms in the country, particularly with specific reference to power and oil and gas, saying that the Committee believed this must be completed in order to ensure foreign direct investment inflows to crucial sectors of the economy on a sustainable basis.
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