Reduce lending rates to boost economic growth, experts tell CBN

SOME financial experts, on Monday, advised the Central Bank of Nigeria (CBN) to reduce the banks' lending rates to boost economic growth.They told the (NAN) in separate interviews in Lagos, that this became imperative to stimulate sustainable growth in the economy.The banks' lending rates vary from 24 to 30 per cent.A former President of Association of National Accountants of Nigeria (ANAN), Dr. Samuel Nzekwe, said that the manufacturing sector had been inactive due to inability of the manufacturers to get bank loans.'If the apex bank wants to stimulate the economy, it has to bring down the interest rates and make them affordable to interested investors to boost employment generation,' he said.According to him, the high lending rates have retarded investment in the economy, as investors are no longer willing to borrow at high rates.Nzekwe advised the CBN to make interest rates on savings more attractive if the apex bank was expecting positive results from its policy on cash-less economy.The General Manager of Cash Craft Assets Management Limited, Ayodeji Fagbenle, said that lower interest rates would not only help the small businesses, but also increase the level of employment generation.'When employment is provided for the unemployed youth, the crimes rate will reduce,' he said.Fagbenle said that with low interest rates, people would be willing to start their own businesses and this would have multiplier effects on the nation's economy.He said that it would also impact positively on the nation's Gross Domestic Product growth rate.The General Manager, Regency Assets Management, Adegbuyiro Adewale, said that farmers would have access to loans at affordable rates and boost the agricultural sector when lending rates were made attractive.Adewale said that the food production would also increase and this would impact positively on foreign exchange earnings.'The ability of the CBN to effectively reduce the banks' lending rate will remove all forms of impediments towards the development of agricultural sector,' he said.
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