The bank would address the problem of inadequate funding by the financial sector.
The Lagos Chamber of Commerce and Industry, LCCI, on Friday commended the proposal of the Federal Government to establish a special financial institution to attract funds into the country.
The Director-General of LCCI, Muda Yusuf, said in Lagos that such institution would address the problem of inadequate funding by the financial sector.
The Minister of Finance, Ngozi Okonjo-Iweala, said recently in Ilorin that the Federal Government would establish a special institution to attract funds into the economy at lower interest rates.
She said that the institution would lend to the Bank of Industry, Bank of Agriculture and commercial banks to ensure that interest rates were reduced to sustainable levels for indigenous industries to grow.
Mr. Yusuf said that the Federal Government’s intervention was timely because of the difficulties being encountered by entrepreneurs in accessing loans from commercial banks.
“We are excited to observe that the concern of the chamber on high interest rates is now being shared by the Federal Government. High interest rates remain one of the major challenges of enterprises in Nigeria, especially the indigenous ones. The acknowledgement of this reality by the coordinating minister for the economy is a welcome development and indeed a relief,” he said.
Mr. Yusuf said that the chamber had, at every turn, highlighted the profound and negative impact of high interest rates on the economy.
“The issues of high fiscal deficit and high yield on government debt instruments have contributed to high interest rates. The high operating cost of financial institutions is also a major factor. Our monetary policies should be flexible for the benefits of entrepreneurs in business. It is also very critical to ensure access to credit, especially by the Small and Medium Enterprises, by easing the collateral conditions for lending,” he said.
Mr. Yusuf advised the Federal Government to create a structure and process that would ensure the survival of this special bank.
“We hope that the new thrust of policy to bring down interest rates will be sustained,” he said.