CBN Rate Cut Fails to Improve MSME Credit Access

The Central Bank of Nigeria's (CBN) recent interest rate cut has not resulted in cheaper or more accessible credit for Micro, Small and Medium Enterprises (MSMEs), as evidenced by a N537.6 billion decline in private sector lending in September. Dr. Femi Egbesola, president of the Association of Small Business Owners of Nigeria (ASBON), expressed concern that the rate cut has not translated into affordable credit, highlighting ongoing challenges such as high borrowing costs, stringent collateral requirements, and short repayment periods.

He noted that these barriers hinder MSMEs' ability to purchase raw materials, maintain production, and expand operations. While fintechs are providing quick loans, Egbesola cautioned that their models are not suitable for long-term growth.

He urged the CBN to implement structural measures, including strengthening credit-guarantee schemes and promoting transparency in bank lending to small businesses. Mr. Ambrose Omordion from InvestData Consulting Limited remarked that Nigerian banks are not aligned with the CBN's strategy to boost lending, despite having liquid funds available.