By Babajide Komolafe
First Bank of Nigeria PLC has unveiled a framework for single digit interest rate funding for small and medium industries in the country.
Under the framework, which is in partnership with the National Association of Small and Medium Industries (NASI), First Bank will provide loans to SMIs who are members of the Association at nine per cent interest rate.
Speaking at the MoU signing ceremony last week, Group Managing Director/Chief Executive, First Bank PLC, Mr Bisi Onasanya said that , “This scheme and MoU signing is not about profitability. The nominal interest rate that we would charge, which is at single digit interest rate, is just to make sure that we cover basic cost of funds that are being deployed.
This MOU is in furtherance of the Bank’s support for Small and Medium Scale Enterprises and it is meant to promote the growth and development of SME industries and industrialists in Nigeria.
This MOU also supports the Bank’s strategic focus on financial inclusion as it would mitigate the challenges of credit delivery to the unbanked market segment through mobilized funds which will avail credit facilities to registered NASSI members at concessionary rate.
In addition to warehousing and disbursing mobilized deposits, FirstBank is also committed to support NASSI through business advisory services, capacity building and development of relevant IT infrastructure as well as the issuance of our bio-metric identity card to all NASSI members.
You can rest assured that the Bank has immeasurable capacity to deliver on this business partnership, given our 118-year heritage and business practices which have sustained FirstBank as the number one bank in Nigeria in various financial metrics such as total gross earnings, total assets, total loans and total deposits.
“The greatest impediment to the development of small and medium enterprises in Nigeria is access to finance. Unfortunately banks have found themselves in a position where they all rush to lend to those firms that do not need to be so supported. We all rush to give money to multinational companies, who if we are not careful will take those loans from us and plow them back into money market instruments.
The reality is that those who need those loans are those who find it most difficult to get. So we have taken this up as a challenge in First Bank to break this barrier to access to finance for small and medium industries. This is on the condition however that in return, you will also do something, which is to ensure that the typical Nigerian attitude to loans and to repayment of loans do not creep into this product.