High interest rates charged by Nigerian banks are forcing many small and medium scale enterprises (SMEs) to borrow funds from outside the country where interest rates are below 10 per cent, the Group Managing Director of Omatek Ventures Plc, Mrs. Florence Seriki, has said.
Speaking during the visit of the Minister of Trade and Investment, Mr. Olusegun Aganga, to Omatek factory in Lagos last Monday, Seriki said that despite efforts to make local banks support SMEs, interest rates have remained high.
Interest rates in Nigeria are within the range of 18 per cent and 22 per cent.
According to her, because of high interest rates, Omatek and some other indigenous firms had been seeking cheaper funds outside the country.
"We have been borrowing offshore due to double-digit interest rates in the country. Outside, we are able to borrow at single-digit interest rate. The government should make more effort so as to bring interest down to single digit so that manufacturing companies can borrow at cheaper rate and expand to create more jobs and reduce unemployment level in the country," she said.
In his response, Aganga said the government was working on the establishment of a financial institution that would provide long-term funding for companies.
The minister, who hailed the innovative and solution-driven vision of Omatek , promised that the ministry would partner the company so as to make the firm a force to reckon with in computer manufacturing.
Also speaking, the Chief Executive Officer of the Nigerian Stock Exchange (NSE), Mr. Oscar Onyema, said as the only computer company listed on the exchange, he was pleased with progress being made by Omatek.
"There are listed companies that tell you what they produce. But you do not see those things. I am impressed with what I saw in the factory of Omatek and the stock exchange is prepared to support the company for improved results," Onyema said.
According to him, instead of going abroad to source for funds with the risk of exchange fluctuation, Omatek should access the capital market for more funds, noting that more companies are planning fresh capital raising exercise as the market witnesses further rebound.
Seriki had disclosed that Omatek is the only one in Africa with a 24-hour power solution through its solar powered panels.
She said that some of the innovations of the company include producing PCs and notebooks, computer chassis, multimedia loudspeakers and reducing the 60 watts bulb to just seven watts and a 168 watts-lit area with 36 watts with a guarantee of 3-5 years.