Under the leadership of Governor Yemi Cardoso, the Central Bank of Nigeria (CBN) has raised the monetary policy rate (MPR) by 750 basis points, from 18.75% to 26.25%, aiming to combat inflation and promote economic stability.
Nigeria’s real estate sector is vital to the economy, and securing favorable lending rates is crucial for developers and investors. Banks offer various lending rates tailored to the needs of real estate businesses. Borrowers should consider both prime and maximum lending rates, along with their specific financial circumstances, to choose the best banking partner for their real estate investments.
The prime rate indicates the best possible rate offered to the most creditworthy customers, while the maximum rate suggests the upper limit of interest rates for loans, applicable in higher-risk scenarios or different loan structures.
As of May 10, 2024, here are the top 10 banks with the lowest prime lending rates for real estate businesses in Nigeria, based on CBN’s weekly interest rates data:
1. SunTrust Bank
– Prime Rate: 7%
– Max Rate: 10%
– SunTrust Bank offers the lowest prime lending rate, making it the most cost-effective choice for real estate businesses.
2. Nova Merchant Bank
– Prime Rate: 12%
– Max Rate: 20%
– Nova Merchant Bank provides a significantly lower prime rate, making it one of the most affordable options for real estate lending.
3. Standard Chartered Bank
– Prime Rate: 19%
– Max Rate: 26%
– Standard Chartered Bank offers attractive lending rates, balancing affordability and risk management.
4. Citibank
– Prime Rate: 19.5%
– Max Rate: 29%
– Citibank’s favorable prime rate is coupled with a higher max rate, indicating potential variability in borrowing costs.
5. Union Bank
– Prime Rate: 19.65%
– Max Rate: 33%
– Union Bank’s competitive prime rate is offset by a high max rate, which could lead to substantial increases depending on loan conditions.
6. Greenwich Merchant Bank
– Prime Rate: 20%
– Max Rate: 25%
– Greenwich Merchant Bank offers a slightly higher max rate, providing room for rate adjustments based on borrower risk profiles.
7. Guaranty Trust Bank
– Prime Rate: 20%
– Max Rate: 20%
– Guaranty Trust Bank’s fixed rates offer predictability in financing costs, beneficial for borrowers seeking consistency.
8. Stanbic IBTC
– Prime Rate: 20.5%
– Max Rate: 38.4%
– Stanbic IBTC’s significant max lending rate requires caution due to potential rate hikes linked to varying credit risks.
9. Globus Bank Ltd
– Prime Rate: 21.41%
– Max Rate: 28.5%
– Globus Bank Ltd provides competitive initial rates with a similar risk premium structure as Access Bank.
10. Access Bank
– Prime Rate: 22%
– Max Rate: 28.5%
– Access Bank’s prime lending rate is the highest among the top 10, but its max rate indicates flexibility for riskier clients.
These banks offer a range of lending rates that can cater to different financial needs and risk profiles within Nigeria’s real estate sector.