Organised private sector groups have welcomed the Central Bank of Nigeria’s (CBN) 350-basis-point cut in the Monetary Policy Rate (MPR), from 26.5 per cent to 23 per cent, but insisted the benefits would remain theoretical unless banks pass them on through lower lending rates.
The Lagos Chamber of Commerce and Industry (LCCI) described the cut as a significant easing of monetary conditions and a welcome development for businesses, particularly micro, small and medium enterprises (MSMEs), which have long been constrained by the high cost of credit.
Its Director-General, Dr Chinyere Almona, said a lower policy rate could reduce the cost of funds, improve credit conditions and support investment, but cautioned it should not be interpreted as an automatic reduction in the cost or availability of credit.
She cited high energy costs, elevated logistics and transportation expenses, exchange-rate risks, rising input costs, infrastructure deficiencies and insecurity as factors shaping lenders’ risk assessments, particularly for MSMEs, noting that commercial banks weigh borrowers’ cash-flow capacity, collateral, credit history, sectoral risk and repayment capacity, not just the CBN’s policy rate.
Almona urged the CBN to closely monitor how commercial banks respond in lending rates and credit allocation to productive sectors, and called for stronger credit guarantees and de-risking instruments for viable SMEs without compromising prudent banking standards.
