While all the goverment of serious country all over the world are slashing their interest rate to 1% sometimes 0%. The cabal that runs the Nigeria banks and central bank still maintain this clueless economy sense. Yaradua thinks by reducing the salary of the political office holder will improve Nigeria economy situation as if this people really depend on their salary to survive . How can any nation that have the interest of her citizen at heart justify 30% interest rate?

Discuss,

What's there to discuss? You need economics 101 to understand demand and supply? You want to see some US banks charging 39% on certain customers?

Interest rate is lower in other countries because of foreign investment. The more money people pour into your country, the lower the cost of borrowing money

naijaking1:

What's there to discuss? You need economics 101 to understand demand and supply? You want to see some US banks charging 39% on certain customers?

You need more than ECS101 to understand  micro/macro economic theories.Reduction of interest rate stimulate business borrowings and investments.

walata44:

While all the goverment of serious country all over the world are slashing their interest rate to 1% sometimes 0%. The cabal that runs the Nigeria banks and central bank still maintain this clueless economy sense. Yaradua thinks by reducing the salary of the political office holder will improve Nigeria economy situation as if this people really depend on their salary to survive . How can any nation that have the interest of her citizen at heart justify 30% interest rate?

Discuss,

Salaries of government functionaries is only fraction of the expenses and allowances they collect  and that is a heavy weight to the overhead cost of running the government of the day.

30% interest rate is just a bleeding rip off!

MrCrackles:

30% interest rate is just a bleeding rip off!

Do you need a Price Interest Control Board to determine and enforce interest rates? Remember how well it worked the last time our "smart army-economists" tried it?
No question that high interest rate stunts the economy---- that maybe the intention, if there is no demand, there will be no need to supply the product.
How about the some Islamic banking- without interest(or very low fixed interest)? Once again, how has that worked?

Here's the latest news on credit reporting agency in naija:

http://www.nigeriamasterweb.com/paperfrmes.html


Home Money Banking & Finance UBA, other banks pioneer credit bureau establishment
UBA, other banks pioneer credit bureau establishment
Friday, 13 February 2009 00:08 NGOZI UCHE
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The need for a financial infrastructure that provides information on credit profiles of corporate entities and individual customers has been met by the emergence of Credit Reference Company (CRC) Limited in the country, a world-class credit bureau.
At the road show cum awareness campaign, held in Lagos at the corporate headquarters of UBA plc, the company management provided insight on the roles of a credit bureau to the economy.
Tony Elumelu
The group managing director, UBA plc, Tony Elumelu, observed that the bank saw the need for such an infrastructure in the financial services industry as far back as 2002, and initiated collaboration with the promoters of CRC and in the process, other financial institutions bought into the idea and made their stake.
He expressed confidence in the management of CRC to be able to deliver the quality of service the organisation was set up to provide.
The company is in association with some international institutions that facilitate the establishment of world-class credit bureaus, like Dun and Bradstreet, Accenture and International Finance Corporation (IFC).
According to Elumelu, “a company like this is one of the infrastructure needed in the economy to provide relevant data to the financial industry”.
The managing director of CRC, Tunde Popoola stated that the establishment of the credit bureau in the country would revolutionalise access to credit for both the borrowers and lenders.
He said it would change the psychology of individuals on credit by eliminating fraud and reducing incidences of loan defaulters.
“If you know that your history is available, that the loan you took from bank A, you did not pay back and that the record are there for other financial institutions to see, then it will make people to get committed to meeting their obligators to their creditors”, he explained.
The pioneer chairman of CRC, Angela Nwabuoku, who is also an executive director in UBA flagged off the road show.
At present, CRC has about 14 banks that have signed on to their service which is to take off by May.

This will be interesting

Fingers crossed on how successful it will be!

Once again, my point is that some customers, some situations, some circumstances deserve applicable market interest rate; 30% or even higher, while some deserve and even attract lower rate.

naijaking1:

Once again, my point is that some customers, some situations, some circumstances deserve applicable market interest rate; 30% or even higher, while some deserve and even attract lower rate.

Yeah

High risk customers deserve large APR's/EAR's while low risk customers deserve low APR's/EAR's

But how do we reconcile that in Nigeria?

MrCrackles:

Yeah

High risk customers deserve large APR's/EAR's while low risk customers deserve low APR's/EAR's

But how do we reconcile that in Nigeria?

Good question my brother, we'll see how the UBA guys answer that in a country without ID #, or social security number.

Nigeria need to find out from the U.S. The Nigerian banks are lending at high rate now for low terms, wait and see, it will get to a time the value of their collateral will fall and borrowers will default, then, they will have problem. This is one of the reasons why wall street ran into problem.

naijaking1:

Good question my brother, we'll see how the UBA guys answer that in a country without ID #, or social security number.

or a credit reporting agency

What is the savings rate in Nigeria, shouldn't it be high too?

A 30% interest rate isn't so bad o,,  ,  ,  ,  .   if you intended to start your own cocaine manufacturing and distributing business with the money. Guess it won't be so hard to pay back the 130% the following year.

jensinmi:

A 30% interest rate isn't so bad o, if you intend to intend to interest in starting your own cocaine manufacturing and distributing business.

naijaking1:

Good question my brother, we'll see how the UBA guys answer that in a country without ID #, or social security number.

National ID or SSN is seriously needed in nigeria for these ideas to work, but it wont work at all even if the banks decide on 0% interest rates. What is the borrower going to do with the loan, buy a big generator for production first?

No electricity, no development.

my colleague is officially on 32℅ rate.... suicidal