Nigerians to start using gold as collateral for bank loans – Minister

The Minister of Mines and Steel Development, Olamilekan Adegbite, said on Sunday Small and Medium Enterprises (SMEs) would soon be allowed to obtain a loan with their gold in banks.

Adegbite, who disclosed this to journalists in Abuja, said the gold jewellery would serve as collateral for SMEs in need of financial support to grow.

The initiative, according to him, will increase credit availability and collateral options for loans.

The minister said talks are ongoing with some Nigerian banks to ensure the implementation of the initiative.

He said: “We are discussing with some financial institutions to create products to accept the gold jewellery from Nigerians and give them credit that is within the worth of the commodity.”

“The initiative is meant to revive the mines and steel industry. The demand for gold in exchange for loans will improve the value of the commodity and the importance of the sector.

“Banks will keep the gold in their vault and handover a certificate which the small and medium business owners can make use of to secure a loan from either the bank or another deposit money bank.”