Why Banks Don't Give Long-Term Loans–Alex Otti

Group Managing Director/Chief Executive Officer, Diamond Bank Plc, Dr Alex Otti, has explained why most users of banks in Nigeria do not get long-term loans whenever they make such requests from their financial institutions.

Otti, speaking recently as a panelist at the 11th Centre for Values in Leadership, CVL, in honour of Olasubomi Balogun at 80, described the Nigerian economy as a short-term economy.

The Diamond Bank boss lamented the dominance of short-term savings deposit base of the Nigerian banking system, saying it hampers long-term lending for infrastructural development. He explained that most borrowers ask for five to 10-year money when they hardly make deposits that exceed 90 days. As such, banks are constrained in lending for long-term, as no one gives out what he or she doesn’t have.

“Who has deposit in any bank today that is more than 90 days? Somebody comes to me and says I want five-year money. Did you give me five-year money?” he asked.

Also speaking at the occasion, CVL founder, Prof Pat Utomi, revealed that Balogun was being honoured for his pioneering work in building enterprise in the banking sector that has become among the most modern in the Nigerian economy to be dominated by indigenous entrepreneurs.

Utomi noted that “the leadership without title tribute series is proud to identify an aspect of the life’s journey of the subject of tribute series to use as example for the generation next.

“In the example from the career of tribute target, we excise a topic for the colloquium, which is the vehicle for conveying learning to young people.”

He said the theme of this series is ”Interrogating the spirit of enterprise in financial services.”

In his remarks, Otunba Balogun, founding chairman of First City Monument Bank, FCMB, said he was overwhelmed by the gesture being extended to him by CVL.
He narrated the abridged story of the process that led to the establishment of Icon stockbrokers limited (Merchant Bankers) and wants the younger generation to know that  there is a skill in everyone that needed development and that “with God, all things are possible.”

Notable panelists at the Colloquium include Guaranty Trust Bank (GTBank) founding Chief Executive Officer (CEO) Fola Adeola, Group Managing Director/ CEO Diamond Bank Plc Mr. Alex Otti and Lagos Chamber of Commerce Director General, Muda Yusuf. Other Panellists, includes Canada based Economist and former Banker Fred Olaleye and management consultant Eileen Shaiyen who spent a good part of her career in banking as well as Professor Doyin Soyibo.