The House of Representatives has urged the Federal Government to establish a special emergency funding scheme for small and medium-sized enterprises, with loans offered at single-digit interest rates to reduce the burden of high borrowing costs on businesses.
The resolution followed a motion sponsored by the member representing Ede North/Ede South/Egbedore/Ejigbo Federal Constituency of Osun State, Bamidele Salam, during plenary on Tuesday.
The lawmakers also called on the Central Bank of Nigeria to review its lending policies and risk-pricing measures affecting small businesses.
The House further urged the Bank of Industry and the Small and Medium Enterprises Development Agency of Nigeria to receive special funding to enable them provide affordable loans to eligible businesses.
Salam said high interest rates, stringent collateral requirements and cumbersome documentation were making it difficult for SMEs to access credit needed for working capital, equipment, wages, inventory and expansion.
He noted that although the CBN recently reduced the Monetary Policy Rate from 26.5 per cent to 23 per cent, commercial lending rates remained high, reportedly ranging between 20 and 46 per cent annually.
The lawmaker warned that expensive credit could force businesses to increase the prices of goods and services in order to meet repayment obligations, potentially reducing demand and threatening their survival.
The House also directed the Federal Ministry of Industry, Trade and Investment to organise an Emergency National Summit on Affordable SME Finance within 30 days.
The summit is expected to bring together government agencies, financial institutions and SME associations to develop measures for reducing borrowing costs, simplifying loan applications, accelerating disbursements and expanding access to government-backed credit facilities.
