Banks urged to remain ethical, professional in operations – Ajibola
A Professor of Economics and Dean, College of Post-Graduate Studies, Caleb University, Imota, Lagos, Prof Joseph Ajibola has urged banks to remain ethical and professional in the conduct of their lending business, as well as restructure their operations and business template to directly source longer-term funds.
Ajibola, who is also the President, Chartered Institute of Bankers Association of Nigeria (CIBN), made this disclosure while delivering the 3rd inaugural lecture of the University titled:“Rhythms and Riddles of Bank Credit Synergies and Dislocations in Nigeria’s Economic Growth”, at the Multi-purpose Hall of the University recently.
He explained that researches have shown that bank credit is a pre-requisite , and a necessary though not sufficient condition for sustained economic growth in Nigeria, adding that banks must therefore continue to play the critical intermediating role in the economy by creating a veritable link between the surplus funds units and deficit funds units of the economy.
According to him, “In line with the above findings that demonstrated more positive growth from loans for lagged period, banks should redefine their lending behavior to favour longer tenor loans which are more impactful for the real sectors of agriculture and manufacturing in the country.”
Ajibola, who was the former General Manager of First City Monument Bank, First Bank and the defunct Intercontinental Bank, among others, noted further that there is a nexus between bank credit and Nigeria’s economic growth stressing that while there is no doubt that bank credit is a key driver of Nigeria’s overall economic growth, the impact varies considerably when the economy is disaggregated into sec tors and subsectors.
The inaugural lecturer suggested that the problems associated with economic growth in Nigeria cannot alone be resolved by deployment of money to the various sectors but rather by a package of policies that would address other macroeconomic challenges of inflation, availability of foreign exchange, infrastructural deficiencies and security among others.
He, however, urged the government to continue to initiate policies and programmes aimed at promoting industrial harmony, socio-political and economic stability in the country.
Esther Taiwo
