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Manufacturers seek own bank

By on October 20, 2014

Owing to difficulties in accessing credit facilities, some members of the Manufacturers Association of Nigeria have called on MAN to establish a bank that will be run by the association.

The call was made by a manufacturer, Dele Bialose, the executive director of B.B. Michael at the annual General Meeting of MAN, Ikeja branch, which held in Lagos on Thursday.

Bialose said banks demand too much from borrowers and at the end, would still refuse to grant the loan. “Apart from the collateral, they make a lot of other demands and they will tell you that you are not qualified after meeting all the demands.

“Nigeria has a lot of money to give out and we are the job creators. They need us to function. I believe if we have our own bank, run by MAN, they will be looking for us to give us the money under a more relaxed condition,” he stated.

Bialose’s suggestion elicited cheers and applause from members of the association.

His claim was echoed by another member of the association, CEO of Peal and Seal Envelopes, Layo Okeowo who said when she tried to access the N220bn Federal Government MSME loan, she met with so much bureaucracy that she was forced to abandon her quest. She decried the high interest rate charged by banks, noting that it was killing the manufacturing industry.

Speaking in defense of the banks, Regional manager, Diamond Bank, Ikeja, Benson Oraelosi, who represented the guest speaker, Group Managing Director and Chief Executive of Diamond bank, Alex Otti, said the responsibility for ensuring smooth access to the fund should not rest on the banks alone but that MAN should share part of the blame for not playing intermediating role in the disbursement process.

“MAN should have played a mediating role in the MSME loan. The association should have been a conduit pipe through which the funds got to its members. They should have appointed financial experts to monitor and ensure that the funds were accessed by the right people and used for the purpose for the intended purpose.

That way, the credibility of the borrowers would be ascertained. The Bank of Industry and the commercial banks have a relationship where the intervention fund is concerned and in matters such as roll over loans, we deal with the transaction of borrowers in creating secure loans.”

Oraelosi added that in dealing with the transaction of borrowers, the bank stipulated that every business with a monthly turnover of N100, 000 was qualified to access the loan but the stipulation opened the system to fraud.

“People started assisting themselves with the turnover amount. In the process of doing this, we were faced with a situation where three people would assist one borrower with the turn over amount so that the bank ended up lending money to one person on the turnover of four people,” he said.

He attributed the shortage of lending money and high interest rate to government policy that had stipulated that 75% of depositors’ funds should be kept with central bank of Nigeria, leaving banks with only 25% with which to trade.

On his part, the chairman of MAN, Ikeja branch, Oba Okojie urged members not to sit and watch the economy being grounded as a result of unemployment, insecurity, high interest and exchange rates, but to rise and demand that the government should the right thing by making good policies that will ultimately set the economy on the right course.

“For our nation to rise above all challenges and join the league of developed nations, we must empower manufacturing sector to do business. Our businesses and products must be encouraged to be of international standard,” he said.

Speaking on the theme of the AGM which was ‘creating a vibrant economy through sustainable entrepreneurial development,’ the President of the association, Frank Jacobs, noted that the primary focus of the AGM was to review the ever changing business environment of Nigeria and draw government’s attention to existing constraints and offer recommendations.

 

[Punch]