Industrialist Calls for Re-Organisation of Industry-Based Banks

His words, What I think government should do is to re-organize all these industry-based banks. Government should give these banks more powers to meet the need of the operators, especially the commercial firms. These big firms enjoy economy of scale and because of that; they mark more margin unlike the small farmers. They should restructure the banks in such a way that if the big firms want like N100 - N200 million, they should be able to intervene.

Not on the ground that big firms cannot take more than N5 million from the banks. They should support them to have financial muscle to support our businesses. But they are trying for small farmers.

I know people are taking loans of N200, 000, N500, 000 because their businesses are too small, what about the big businesses ? On how he would contend with high interest rates charged by commercial banks, he suggested that the loans should be restructured in such a way that it would not be the major source of finance. If bank loan is only the major source of your finance you will end up working for the bank at the interest rate of 20 per cent.

They will tell you that the interest rate is about 18 per cent, but by the time they add other charges, it will come up to 20 per cent and that is the industry average. And if you are running a business that you make only 10 per cent gross margin, how would you pay for the bank loan? , he asked.