ABUJA, May 4 (Reuters) - Nigerian lawmakers on Tuesday urged
the central bank to standardise commercial lending rates to
support small businesses and get credit flowing to the real
economy in Africa's most populous nation.
Nigeria escaped its second recession in five years in the
fourth quarter of last year, but growth remains fragile as the
country battles double-digit inflation, mounting insecurity and
a shrinking labour market.
Lawmakers in the house of representatives said banks were
making "unfair profit" by charging lending rates of up to 25%,
compared with the central bank's benchmark rate of 11.5%, while
paying only 8% on deposits.
Nigeria's central bank has sought to boost lending after it
increased the minimum loan-to-deposit ratio and cut rates twice
in 2020 to encourage banks to support the economy. But
regulating commercial lending rates could curb profits, analysts
have said.
Pressure from lawmakers to bring down lending rates could
create challenges for bank margins, particularly in the face of
historically low bond yields. It could also affect loan growth,
analysts say.
Nigeria's banking sector is one of the thriving industries
in the country, lawmakers said in a motion, attracting foreign
investors thanks to its profitability.
However, stagflation risk and dollar shortages are forcing
lenders to seek new ways to boost profits. Nigeria's biggest
lender, Access Bank ACCESS.LG , for example, is expanding
across the continent.