The Ogun State chapter of the Road Transport Employers Association of Nigeria (RTEAN) has formally requested the Federal Government to establish a dedicated Bank of Transportation, designed to provide road transport operators with affordable loans at interest rates between 4% and 9%.
RTEAN's Appeal for a Dedicated Transport Bank
The association's State Secretary, Aare Tiwalade Akingbade, made the appeal on Tuesday at the RTEAN secretariat in Abeokuta, Ogun State. He explained that the proposed bank would enable operators to acquire vehicles, expand their businesses, and improve service delivery.
Akingbade noted that RTEAN has submitted several proposals to the Federal Government, expressing optimism that the establishment of a dedicated financial institution for the transportation sector would be considered.
Why RTEAN Wants Lower Lending Rates
The state secretary argued that conventional banks' lending rates, which average about 25%, are too high for transport operators to repay loans and maintain profitable businesses. He questioned why transport operators should be charged rates comparable to those in sectors such as oil and gas.
“If you are in the road transportation business and have to obtain loans from the same financial institutions that lend to operators in sectors such as oil and gas, at interest rates of 25%, how do you expect to repay such loans and remain profitable?” Akingbade asked.
He stressed that the association is not seeking free money but affordable financing tailored to the needs of transport operators. “We are not asking for free money. All we are asking for is a dedicated platform that will give transportation operators access to loans at affordable, single-digit interest rates of between four and nine per cent,” he said.
Training and Medical Outreach in Ogun State
In a related development, 20 members of the Ogun State chapter of RTEAN received certificates after completing a three-day conflict resolution training programme organised in collaboration with the Federal University of Agriculture, Abeokuta (FUNAAB). The programme was facilitated through FUNAAB's Institute of Communication and General Studies under its Peace and Development Studies Programme.
The certificates were presented at Tuesday's meeting by the association's Deputy Chairman (Administration), Otunba Segun Johnson, on behalf of the State Chairman, Alhaji Akibu Titilayo Efele.
Akingbade said the training was designed to help members resolve disputes, improve their relationships with passengers, and manage their responsibilities as transport operators and employers. He added that participants could further their education through advanced certificate and diploma programmes in conflict resolution.
Additionally, the association screened more than 100 people during a medical exercise, as part of its efforts to support the well-being of its members and the community.
Impact on the Transportation Sector
Akingbade emphasised that an efficient, reliable, and affordable transportation system is essential to economic development, noting that road transport connects passengers to other modes of transportation, including rail, water, and air.
Earlier, the Central Bank of Nigeria (CBN) released its latest lending rates following a decision to cut the interest rate by 50 basis points to 26.50% from 27%. The apex bank announced the new MPR rates during its 304th Monetary Policy Committee (MPC) meeting. CBN Governor Olayemi Cardoso stated that all members of the MPC unanimously agreed upon the decision.
If the Federal Government heeds RTEAN's request, the establishment of a Bank of Transportation could significantly lower financing costs for road transport operators, potentially improving their profitability and service quality across Nigeria.
