Members of the Organised Private Sector (OPS) have stressed the need for the banking industry to stimulate investment by identifying and funding small businesses with good prospects, as well as facilitating the exchange of goods and services for economic growth.
These formed the highlights at the first National Stakeholders Conference organised by the Association of Corporate Affairs Managers of Banks (ACAMB) in partnership with CIBN and support from Deposit Money Banks (DMBs) with the theme, ‘Promoting synergy between the Banking Industry and the Organized Private Sector’, held yesterday in Lagos.
The National President, Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Ide John .C. Udeagbala said an efficient financial system breeds a vibrant economy that promotes sustainable inclusive economic growth and development across all sectors.
According to him, fostering synergy between the banking industry and the OPS ensures the promotion of a ‘collective voice’ and increased influence on policy formulation for the private sector, as well as, increased accessibility to vital resources, especially in the areas of funding.
Udeagbala said the sector acknowledged the role the banks play in ensuring the protection of the industry from issues that may affect their sustainability, such as over exposure to non-performing loans and subsequent collapse.
However, he stated that active collaborative efforts between the banking industry and the OPS would help manage and possibly reduce such risks, while also ensuring that private sector customers become more organised in their business operations.
“As the Nigerian banking sector struggles with market, operational, reform and regulatory challenges in a bid to ensure sustainability as profit-making entities; the private sector groans with the perceived difficulty in access to finance.
He added: “it is safe to conclude that the more active and synergistic the relationship between banking and private sector, the more we are collectively able to develop and grow the national economy for a sustainable Nigeria.”
Also speaking, the Director General of the Nigeria Employers’ Consultative Forum (NECA), Adewale Oyerinde said the industry-banking relationship in the country has lost steam as underlined by the declining quantum of loan extended to the productive sector over the years.
According to him, reports from the CBN Statistical Bulletin showed that the share of commercial loans to the manufacturing sector to the aggregate loan to the economy averaged 0.1 per cent from 2017 to 2021.
Oyerinde maintained that the development, in no doubt, limits manufacturing activities in the country in terms of investment and production.
“The industrial and the banking sectors are critical components of any economy. The industry needs the banking sector credits to improve investment and production while the bank needs the rental income and equity subscription from the industry to maintain financial stability.
“Availability of fund and at cheaper rate reduces the cost of production, improves the quality of outputs, or the efficiency with which inputs are transformed into outputs and contributes to the growth of private sector in an economy and the multiplier effect will be poverty reduction; increase in per capita income, increase in the competitiveness of the country and by extension, economic growth.
He said the current low performance of the industrial sector, particularly manufacturing, is due to the limited funds available, which does not allow for significant investment and expansion in productive activities.
Therefore, he urged banks to intensify efforts towards addressing the gap in banking sector lending to the industry to restore and improve the mutual interdependence of the two sectors in achieving the separate objectives while contributing significantly to national growth.
Earlier, the President of ACAMB, Rasheed Bolarinwa said the Nigerian banking industry has been the most misunderstood sector of the economy by its critical stakeholders over the years which has resulted in avoidable ‘confidence crisis’ with the organised private sector (OPS).
He said despite a series of efforts made by industry leadership to address and resolve the prolonged mistrust, there exists a widening communication gap between these two key stakeholders, thus signaling the need for a rethink of strategy towards achieving an enduring synergy.