Nigerian manufactures have called on the Federal government to initiate and implement policies that will lead to a reduction in the rate at which banks lend to them.
This followed the calibration of the monetary policy framework by the Monetary Policy Committee (MPC) at its meeting of 22 September 2026 and the reduction of the Monetary Policy Rate MPR] by 350 basis points from 26.5 per cent to 23 per cent.
Analysts agree that the policy signals an important rebalancing of monetary policy towards supporting growth, investment and economic recovery, while preserving price and financial-system stability.
According to the Executive Director of the Centre for the Promotion of Private Enterprise (CPPE), Dr. Muda Yusuf, the review of the asymmetric corridor around the MPR from +50/-450 basis points to +50/-300 basis points has reinforced the recalibration of the monetary policy architecture.
“For many businesses, commercial lending rates have remained at levels that are difficult to reconcile with productive investment, particularly in manufacturing, agriculture, construction, logistics and other sectors with relatively long investment cycles and tight margins.
“The policy adjustment therefore offers an opportunity to reduce the cost of capital, improve business cash flows, stimulate investment and strengthen the productive capacity of the economy,” he posited.
However, the ultimate economic value of the decision will depend on transmission.
He tasked banks to reflect the new monetary policy environment in the pricing of credit, adding that lending rates on both new and existing facilities should progressively adjust downwards. “Without meaningful transmission to borrowers, the impact of the policy adjustment on investment and economic growth would be limited,” he posited.
However, Dr. Chinyere Almona, the director general of the Lagos Chamber of Commerce and Industry (LCCI), said that the decision to reduce the MPR by 350 basis points, from 26.5 percent to 23 percent is good news to manufacturers and the Nigerian business community.
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According to her, the decision represents a significant easing of monetary conditions and is a welcome development for businesses, particularly micro, small, and medium-sized enterprises (MSMEs), which have been severely constrained by the high cost of credit.
She posited that a lower policy rate can, through the monetary-policy transmission mechanism, should reduce the cost of funds in the financial system, improve credit conditions, and support private-sector investment and economic activity.
However, she said that the reduction in the MPR should not be interpreted as an automatic reduction in the cost or availability of credit to businesses, adding that the transmission from the policy rate to lending rates and actual credit allocation remains critical.
According to her, a lower MPR, the lending environment remains challenging, adding that the reality confronting Nigerian businesses is that the cost of borrowing is only one component of the overall business-risk equation.
“Businesses continue to operate under significant cost pressures arising from high energy costs, elevated logistics and transportation expenses, exchange-rate risks, rising input costs, infrastructure deficiencies, and the generally high cost of doing business,” she stated.
She called for deliberate measures to strengthen the transmission of monetary policy easing to the real sector and urged the CBN and financial institutions to ensure that the benefits of the lower policy rate are progressively reflected in more affordable and accessible credit for productive businesses, especially SMEs.
Almona charged the CBN to closely monitor the response of commercial banks and other financial institutions to the easing of monetary conditions, particularly the movement of lending rates and credit allocation to productive sectors.
According to her, government and financial-sector institutions should strengthen credit guarantees, partial-risk guarantees, and other de-risking instruments that can encourage lending to viable SMEs without compromising prudent banking standards.
However, Mr. Ayodele Olalekan, a Lagos State-based manufacturer, said that banks should stop demanding manufacturers and other businesses to meet conditions that are near impossible to meet.
“Why should a bank ask me to provide a build because I want to access a loan of N100 million? Most manufacturers do not have expensive collaterals, so banks should use other indicators to determine how they can access credit from banks,” he stated.
However, Mr. Saviour Iche, the national president of the Association of Micro Entrepreneurs of Nigeria, said that Nigerian banks are not interested in lending to manufacturers, adding that they want lend only to traders who want short term loans.
According to him, government should enforce a policy that assures that a specific percentage of credit goes to manufacturers and businesses.