Finance Houses Association of Nigeria (FHAN) has called on the Central Bank of Nigeria (CBN) to facilitate access to cheap funds for finance companies.
FHAN President and Managing Director/Chief Executive, CFS Finance Limited, Mrs. Bola Agunbiade, made this call while speaking at the stakeholders' luncheon organised by Crownrise Finance Plc to introduce the N1billion Crownrise Bond.
Agunbiade stated that the greatest challenge confronting the subsector is high cost of funds, adding that CBN can help address this by supporting finance companies with access to cheap source of funds.
She said: "The major challenge that we face as finance companies is that our cost of funds is very high. Most of the times, where we get our funds, from individuals and organisations, they always want a premium, a higher premium than what is obtainable in the money market or in the banking sector. That is why you see some finance companies charging up to 10 percent per month interest rate.
"However it is not all finance companies that charge 10 percent interest rate, there are some that offer 3.2 percent, 3.5 percent.
"That is why we must continually plead with CBN that they need to support us the more. If we get cheaper source of funds, we would be able to lend to Small and Medium Enterprises, SMEs. Our sector is a cash cow sector which we need to develop in this economy and we can provide finance support for the economy. Finance houses have been in existence since 1991, which is over 27 years.
That shows that we are also relevant, we are doing something for the economy. I think the government should try and support us in that area to access cheaper funds."