Senator Ned Munir Nwoko of Delta North, has brought the issue of high banking interest rate to the forefront of the Senate during ministerial screening that was held on Saturday, August 5.
Taking advantage of the ministerial screening, Nwoko raised concerns about the ‘exorbitant’ banking interest rates prevailing in Nigeria. He directed his question to one of the ministerial nominees, Lola Ade John (Lola Adejo) from Lagos state, who is renowned for her expertise in information technology and has a background of serving in various banks in Nigeria.
Nwoko inquired the possibility of government intervening to ensure that banking interest rates are maintained at the lowest possible level for the benefit of consumers.
He highlighted the staggering difference between deposit interest rates, which stand at approximately 5 to 6%, and the lending rates, which soar as high as 20 to 23%. This disparity, according to him, has made it exceedingly difficult for consumers in Nigeria to access loans, hindering their financial prospects.
Drawing a compelling comparison between Nigeria and other developed nations, Senator Nwoko pointed out that many of these countries maintain lending rates between 1 to 5%, a significantly lower range than what is experienced in Nigeria, pointing out that this stark contrast affords citizens in those countries greater financial comfort and flexibility.
In Nwoko’s words, “As an expert in the banking sector, I have always been concerned about interest rates in Nigeria.
“The charges in deposit interest, I understand to be about 5 to 6% but the lending rate is about 20 to 23%. I have always wondered why the government is not able to peg interest rate at a level that is possible for consumers in Nigeria to borrow money.
“When you go to other nations, you see that most of their lending rate is between 1 to 5 percent, and so everybody can prosper. Everybody can borrow to buy whatever they want; Whether it’s for mortgage, vehicles, whatever.
“But the consumers in Nigeria are left to the whims and caprices of the banks. The banks make huge profits at the end of the day.
“Is there no possibility that government can insure that banking interest rates are maintained to a barest minimum for the interests of consumers?”
