Refusal of commercial banks to grant long-term loans hindering our growth – MAN

The Chairman, Manufacturers Association of Nigeria (MAN), Ogun Chapter,Wale Adegbite, has urged commercial banks to give long-term loans to manufacturers to grow the nation’s Gross Domestic Product.
Speaking at 10th Business Luncheon of the association in Ota, Ogun state, Adegbite said `that by providing long-term loans, the banks would have contributed their quota to Nigeria’s GDP.
According to him, banks prefer to give short-term loans to businesses with high turnover in their investments, rather than manufacturers whose investments are usually long-term based.
Adegbite added that the manufacturing sector had the potential to contribute more than what it is contributing to the GDP if long-term loans were available to them.
The MAN Chairman lamented that obtaining loans from commercial banks has not been easy for manufacturers.
He said the refusal of commercial banks to grant long-term loans at low interest rates had hindered sustainable growth in the manufacturing sector and adversely affected the country’s GDP.
“Obtaining loans from regular commercial banks has not been easy for manufacturers as the banks prefer to lend short term loans to businesses with high turnover and higher prospect of quick return on their investment.
“This coupled with cumbersome administrative procedures and astronomically high interest rates and charges have slowed down growth of the manufacturing industry,” he said.