An Industry Captain in the Manufacturing sector has said that Banks fail to grant loan to most Small and Medium Enterprises due to inability on their part to service loan facility, while some of them are even too small to access credit individually.

The Industry Captain, Mr. Muda Yusuf,  Director-General of the Lagos Chamber of Commerce and Industry (LCCI), said, “Commercial banks’ tolerance on the manufacturing sector continues to decline due to the perception of the sector as very risky and SMEs lack of capacity to package bankable credit requests, some are even too small to access credit individually.”

Yusuf noted that most entrepreneurs cannot meet banks’ credit requirement, especially collateral, saying that experience of banks with loan quality of manufacturing and other real sector investors would not dispose them to give further loans.

Decrying the dearth of credit facilities to investors, he said, “it is more attractive to invest in government securities than to invest in ventures that would create jobs.

“Even banks would rather buy treasury bills and government bonds than give loans to investors. This credit and interest rate structure would continue to create distortions in the economy, and perpetuate the phenomenon of jobless growth and further depress the stock market.