OLUKAYODE Pitan, chief executive officer, Bank of Industry, BoI, has said that there exists a financing gap of more than N1 trillion in the country every year. He said BoI had invested over N20 billion in the creative industry.

Pitan, while speaking at the Economic and Business Conference, organised by Rand Merchant Bank in Lagos, said BoI was the biggest financier of the creative industry. While calling on other banks to partner key players in various sectors of the economy, Pitan said most companies were thronging to the BoI to borrow money because commercial banks were making it hard for businesses to thrive due to their over 20 percent (sometimes 30 percent) interest rate on loans.

“People are coming to the BoI to borrow because it makes more sense to them. The BoI gives loans at 10 percent interest rate; if we have an inflation of 11 percent and loans are given out at 10 percent, it means that the lending has been subsidised. The country has about N1 trillion funding gap every year. We want to help, but we have challenges with coming up with the funds people want. That is why we are calling on other banks for support,” he said.

Eme Lore, country manager, International Finance Corporation, Nigeria, said the banking sector was not playing its expected role in the affairs of the economy. She said there was a need to ensure more access to affordable funding by Micro, Small and Medium-scale Enterprises.

Lore stated that the IFC had partnered the government to launch new initiatives that would enable SMEs to use ideas as collateral for loans. She added that legislation had also been made on credit bureau to ensure that a lot of credit information was accessible.

“Achieving real sector growth is a process; it will not happen like that. We need to introduce more initiatives to support real sector growth and attract foreign investment into the country. Investors have a lot of space to invest in Nigeria, but are looking for the right environment. We need to work on our exchange rate environment, power sector reform agenda and the petroleum subsidy,” she said

According to Lore, a lot of people are taking advantage of the petroleum subsidy and the real people are not benefitting from it.

She stated that tackling all the items would increase foreign direct investment, adding that “we do not collect enough revenue in Nigeria as 60 percent of oil revenue is paid out as interest on borrowings”.

– June 28, 2018 @ 19:59 GMT |