Access Bank raises interest rate on directors’ loans to 27.2% after Economy Post report

ACCESS Bank has raised the average interest rate on loans granted to its directors and key management personnel from 8 percent to 27.2 percent, thanks to Economy Post‘s bold reports, which brought the issue to the public.

The tier-1 bank had granted loans to its key management personnel at 8 percent interest rate, while providing the same support to customers and businesses at rates between 27.6 percent and above.

In the first six months of 2023, the bank gave out loans to its management personnel and directors (and their family members) at a tenor of 4 years, while insisting that most of the facilities to individual and corporate customers must not exceed one-year repayment period.

As at June 2023, the Tier-1 bank had granted N1.789 billion to its directors and other key management personnel, including their close family members, at an average tenor of 4 years.

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“The transactions were carried out at arms length and have an average tenor of 4 years,” Access Bank said in its half-year 2023 report.

While Access Bank granted loans to its directors at an interest rate of 8 percent, the Central Bank of Nigeria (CBN)’s monetary policy rate (the benchmark interest rate) stood at 18.75 percent in July 2023, implying that the senior managers and directors were not getting loans from the bank at the market rate.

Incidentally, loans to customers were above 27 percent, prompting Economy Post to report the imbalance in the bank’s lending system.

Increase to 27.2%

With public scrutiny on Access Bank’s lending rate, the bank was forced to raise its interest rate on related party loans in the first half of 2025 from 8 percent to 27.2 percent to somehow reflect the market dynamics. The current CBN benchmark interest rate is 27 percent.

“The loans issued to directors and other key management personnel (and close family members) as at 30 June 2025 included mortgages, overdrafts, credit card and term loans amounting to N1,150bn and they are repayable in various cycles ranging from monthly to
several years for the long-tenored obligations,” the bank noted.

“The transactions were carried out at arms length and have an average interest rate of 27.2% and average tenor of 3.5 years. The loans are collateralised by a combination of lien on shares of quoted companies, fixed
and floating debentures, corporate guarantee, negative pledge, domiciliation of proceeds of company’s receivables, legal mortgages and cash.”

However, the lender reported that credit to its subsidiaries stood at 4.94 percent over the period.

According to the bank, “The loan to subsidiaries relates to a foreign interbank placements of N324mn granted during the period. It is a non-collateralised placement advanced at an average interest rate of 4.94% and an average tenor of 9 months.”

“This loan has been eliminated on consolidation and does not form part of the reported Group loans and advances balance.”

Zenith Bank, Fidelity Bank loans at low rates

Economy Post had reported that Zenith Bank charged manufacturers 38.5 percent interest rate on loans but allowed its key management personnel to take credit at 4 percent.

READ ALSO: Zenith Bank directors pocket N6.8bn in 15 months

The bank increased its interest rate for manufacturers’ loans from 30 percent in 2021 to 38.5 percent in the first quarter (Q1) of 2025, according to data by the CBN.

Also, Fidelity Bank is granting loans to its staff at 3.5 percent interest rate while lending credit facilities to manufacturers at 36 percent.

According to the Fidelity Bank’s 2024 full-year financial statement, its staff owed the bank N14.698 in loans and advances as of December 2024 and they got them at an average rate of 3.5 percent.

“Loans to Staff members include mortgage loans and other personal loans. The loans are repayable from various repayment monthly cycles over the tenor and have an average interest rate of 3.5%. Loans granted to staff are performing,” the bank noted.