Local manufacturing firms have been urged by the Central Bank of Nigeria (CBN) to approach the Development Bank of Nigeria (DBN), Bank of Industry (BOI) and other development banks rather than the Money Deposit Banks (MDBs) for their financial needs.
Deputy Director of Financial System Stability Directorate at the apex bank, Eboagwu Ezulu, stated this at the first National Stakeholders Conference organised by the Association of Corporate Affairs Managers of Banks (ACAMB) in partnership with the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos recently.
At the event, the Manufacturers Association of Nigeria (MAN) complained of the inability of its members to access credit facilities to run their various manufacturing forms.
Ezulu advised manufacturers and members of MAN to approach the development banks for their loans needs, stating that they were created in collaboration with the apex bank for business and infrastructure development purposes.
He said: “I am aware that the Development Bank of Nigeria was established in collaboration with the CBN to provide funding, as well as the Bank of Industry to support the manufacturing sector.
“Have the manufacturing firms approached those entities to use the funds available rather than asking the commercial banks? Banks are supposed to approach the CBN on behalf of their customers to resolve these problems. And as such commercial banks do short time lending and have the primary responsibility to protect their depositors.”
Responding on behalf of the manufacturers, President of MAN, Mansur Ahmed, said the development of the manufacturing sector and the banking sector were expedient for the sustainability of the economy, adding that hence the need for both sectors to work together to reduce poverty, attract investment and boost economic growth.
He said: “The traditional industry-bank lending relationship is no longer supporting the growth of industry. Activities in the manufacturing have massively declined resulting to rising number of moribund businesses and capital flight across the country.
“Based on this information, it is, therefore, important that the commercial banks and the industry should come together to chart new ways of supporting each other to the benefit of all.”
He recommended that the commercial bank should develop corporate patriotism to strengthen the willingness to lend at the interest rates that support the industry and the banking sector for the sake of the economy.
In his presentation, President of the Chartered Institute of Bankers of Nigeria (CIBN), Dr. Ken Opara, noted that the Organised Private Sector (OPS) remained the real drivers of real sector growth and economic advancement through industrialidation, job creation, provision of goods and services and poverty alleviation.
“This a well functioning financial system and rigorous private sector are important drivers of national growth in terms of Gross Domestic Product (GDP), employment generation, economic stability and poverty reduction.
“However, I must admit that there are still a lot of untapped opportunities between the two critical sectors, some of which are attributable to a lack of proper handshake between the bodies. Given the interdependence of the sectors, it has become imperative for both sectors to work together for the benefit of the country’s economic development,” he stated.