By Mardiyyah Abubakar
The House of Representatives has urged the Federal Government to establish an emergency funding scheme offering small and medium-sized enterprises (SMEs) loans at single-digit interest rates to reduce borrowing costs and support business growth.
The lawmakers also called on the Central Bank of Nigeria (CBN) to review lending policies and risk-pricing measures affecting small businesses.
The resolutions followed the adoption of a motion sponsored by Rep. Bamidele Salam, representing Ede North, Ede South, Egbedore and Ejigbo Federal Constituency of Osun State, during plenary on Tuesday.
The House urged the government to provide special funding for the Bank of Industry and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) to expand access to affordable loans for eligible businesses.
It also asked the CBN to consult commercial banks, development finance institutions and SME associations to develop a transparent framework for concessional lending without undermining financial stability.
Additionally, the lawmakers directed the Federal Ministry of Industry, Trade and Investment to organise an Emergency National Summit on Affordable SME Finance within 30 days.
The summit is expected to produce practical measures to reduce borrowing costs, simplify loan applications, speed up disbursements and expand access to government-backed credit facilities.
Moving the motion, Salam described SMEs as critical to Nigeria’s economy, noting their contributions to entrepreneurship, employment and national productivity.
He cited a 2021 survey by SMEDAN and the National Bureau of Statistics, which found that micro, small and medium-sized enterprises accounted for approximately 96.9 per cent of businesses in Nigeria, contributed 46.32 per cent to the country’s Gross Domestic Product and provided 87.9 per cent of employment.
The lawmaker expressed concern that borrowing costs remained high despite the CBN’s reduction of the Monetary Policy Rate from 26.5 per cent to 23 per cent in September 2026. He said commercial lending rates reportedly ranged between 20 and 46 per cent annually.
Salam warned that high interest rates, stringent collateral requirements and extensive documentation were preventing many businesses from accessing credit, limiting investment, expansion and job creation.
He added that expensive loans could force businesses to increase prices to meet repayment obligations, potentially driving away customers and weakening profitability.
The proposed funding scheme and review of lending policies aim to improve access to affordable credit, strengthen small businesses and support employment generation across the country.
