Banks Have failed Nigerians- Osinbajo
The Vice President, Prof Yemi Osinbajo, has thumbs down the activities of commercial banks in the country on the citizenry with no fewer than 40 per cent of the people under-banked.
He stated this at the public presentation and launching of the book “Banking Reform in Nigeria: the Law, the Prospects and the Challenges’’ written by a doctor of Law, former lecturer in the University of Ife and a member House of Representatives, Bode Ayorinde in Abuja.
“It is perhaps accurate to say that for most Nigerians, banks have not really significantly impacted their lives or livelihoods.
“First, the under-banked population is said to be in the order of about 40 per cent, which means that a significant number do not even have access to banking facilities let alone banking products of any kind.
“The majority of those who have bank accounts for a variety of reasons are not able to access personal loans, mortgage or business loans
“This explains why financial inclusion has gained inclusive currency and resonance in the past few years.’’
The Vice President noted that the issue was not just about safe keeping of funds especially for the poor and those in the rural areas, but that of having access to financial products designed for low income earners as well as for the SMEs.
Also speaking at the occasion, Speaker of the House of Representatives, Hon. Yakubu Dogara, called for action against the prevailing banking practices which have adverse effects on business growth and entrepreneurship in Nigeria.
He highlighted issues such as high lending rates and difficulties in accessing loans; and compared prevalent practices in the country with what is obtainable in other jurisdictions.
“The challenge in the banking industry in Nigeria is such that it is organized in such a way that it creates buoyancy and development in other jurisdictions, not in Nigeria. I have had cause to say this before, that unless you have assets or equipment, there is no way you can take loans or access loans from Nigerian banks to do the business. If you are not careful in taking loans from Nigerian banks, one will just end up in the poverty gap.”
“I don’t think our citizens are supposed to do their businesses with money they already have in their pockets. Businesses elsewhere are executed by loans by the banking industry in those countries. I don’t know why the interest rate in Nigeria is so high. What is it that we can do to lower the cost of funds in Nigeria, so that our young men, women and entrepreneurs can risk taking money from our financial institutions in order to realize their dreams?”
“I love the fact that the Vice President is chairing the council on the ease of doing business in Nigeria but in dealing with most businesses, you are forced to ask what business are we doing? How do we fund these businesses?”
“That has been the challenge, from the point of view of the Executive down to the Parliament, the political will to address this has not been there. And the answer has always been that just one opinion cannot solve the issue, all hands need to work at it. We cannot afford to continue having weak institutions in Nigeria, not after so many years of having balance.”
“So I believe that concerning some of these borrowing voyages such as been embarked upon recently can be avoided by applying the required formulas that work even here in Nigeria. The sharp parallel that is drawn between the practice here in Nigeria and the practices in over 20 other jurisdictions of the world.”
The event also had in attendance the governor of Ondo State, Rotimi Akeredolu.