First City Monument Bank, Rand Merchant Bank, Zenith Bank, Fidelity Bank, Eco Bank, and First Bank of Nigeria are charging manufacturers an arm and a leg for loans, precluding them from accessing capital needed for expansion.

According to data obtained from the Central Bank of Nigeria (CBN), First City Monument Bank (FCMB) had the highest lending rate to manufacturers at 45 percent as of February 2025. In fact, the bank raised its interest rate to manufacturers from 30 percent in February 2021 to 45 percent in February 2025, indicating an increase of 15 percentage over the four-year period.

FCMB is followed by Rand Merchant Bank which, incidentally, raised its lending rate to the group to a whopping 45 percent in February this year from 30 percent in 2021. With 45 percent interest on loans, a manufacturer who borrows N1 billion from FCMB must return N1.450 million in 12 months.

READ ALSO: Access Bank grants loans to associates at 8% interest rate, charges customers 28%

Similarly, Rand Merchant Bank increased its lending rate to manufacturers to 44.5 percent as of February 2025 from 17.5 percet four years ago. By implication, a manufacturer who borrows N100 million from Rand Merchant Bank will repay N144.5 million in 12 months.

Zenith Bank increased its interest rate for manufacturing loans from 30 percent in 2021 to 38.5 percent in 2025. This is despite that that the bank’s managers get credit at an average rate of 4 percent, Economy Post earlier reported.

First Bank of Nigeria raised its lending rate to manufacturers to 36 percent from 24 percent, while Eco Bank increased its rate to 35 percent from 25 percent four years ago. Hence, a small-scale manufacturer who borrows N1 million from First Bank will repay N1.36 million in 12 months. If the producer borrows the same amount from Eco Bank, they will repay N1.35 million within the same period of time.

Moreover, Sterling Bank raised its manufacturing lending rate to 37 percent from 30 percent, while Access Bank increased its own rate to 33 percent from 28.5 percent. Also, Fidelity Bank’s rate remained static but high at 36 percent over the four-year period, while Guaranty Trust Bank’s rate stood at 29 percent from 23 percent. Furthermore, United Bank for Africa raised its own rate to 32 percent from 24 percent. Also,

Banks insiders get loans at cheaper rate

Economy Post has repeatedly reported that some banks’ insiders such as managers and directors get loans at single-digit rates (less than 10 percent) while manufacturers, are charged 35 percent to 45 percent.

Zenith Bank‘s key management personnel, including directors and managers, get loans from the tier-1 bank at 4 percent interest rate but charges much higher to small businesses and manufacturers.

READ ALSO: Again, managers take loans from Zenith Bank at 4% interest despite rising benchmark rate

Access Bank also granted loans to its associates and management personnel at 8 percent interest rate in the first six months of 2023, while providing the same support to customers and businesses at rates between 27.6 percent and above.

The bank gave out loans to its associates 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.

Manufacturers’ lamentations

For many years now, manufacturers have been complaining about the high lending rates at deposit money banks and the dearth of growth funds across financial institutions.

In 2018, the Manufacturers Association of Nigeria (MAN) released a survey that showed that banks’ average lending rate to members of the group rose to 22.65 percent in the first half (H1) of 2017 from 21.4 percent charged in the corresponding half of 2016.

In 2024, Segun Ajayi-Kadir, MAN’s director-general, noted in an economic review made available to Economy Post that “rising interest rates posed a major financial burden, with commercial bank lending rates to manufacturers surging to 35.5 percent in 2024 from 28.06 percent in 2023.”

He said that this was driven by continuous CBN rate hikes, which raised the monetary policy rate (benchmark interest rate) to 27.50 percent. “Consequently, manufacturers’ finance costs totaled N1.3 trillion, constraining investment and expansion plans.”

An economist, Dr Doyin Oladokun, wondered how banks would expect manufacturers to borrow “at very high rates” and repay in 12 months.

“You simply can’t have development if you continue to lend at 35 percent – 45 percent to manufacturers. They can’t create jobs and can’t even repay the loans. We are not yet serious as a nation,” Dr Oladokun said.

READ ALSO: After Economy Post stories, CBN sets up panel to investigate loans to banks’ insiders

“China’s prime lending rate (LPR), which is equivalent to our monetary policy rate (MPR), is 3 percent to 3.6 percent for 1-year to five-year loans. Yes, you can argue that the inflation rate there is less than 1 percent, but they have a series of development funds for manufacturers where they can even borrow at rates below the market rate.

“Here in Nigeria, it is traders, bankers and Ponzi scheme drivers who walk into banks and get credits at lower rates. Isn’t that a shame? We need to wake up as a nation.”