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General News of Monday, 25 September 2023


N544.2b COVID-19 loan debtors put under watch

Loans Loans

Those who have defaulted in the repayment of the N544.2 billion COVID-19 Targeted Credit Facility (TCF) given to small and medium enterprises and individuals have been placed under watch.

The Federal Government-owned NIRSAL Microfinance Bank (NIRSAL-MFB), through which the funds were disbursed has moved to recover the loans by activating its Global Standing Instruction (GSI).

Besides, it has uploaded details of all defaulting beneficiaries on the Central Bank of Nigeria’s (CBN) Credit Risk Management System (CRMS) to ensure that its debtors did not access credits anywhere in the world.

Out of the N544.2 billion TCF, N261.4 billion was disbursed to 643,486 households; N112.5billion to 114,476 Small and Medium Enterprises (SMEs) and N14.3 billion to 31,462 individuals through non-interest banks (NIB HH).

About N2.1 billion was also given as loans to 3,523 individuals via the NIB SM scheme; 32,355 got N118.4 billion under the Agric, Small and Medium Enterprise Scheme (AGSMEIS); 107,035 received N33.8 billion via the Anchor Borrowers’ Programme (ABP) and 5,539 loaned N1.96 billion via the Nigeria Youth Involvement Fund (NYIF). All beneficiaries of the TCF, in the process of applying for the facility unwittingly authorised the CBN to institute the GSI on their bank accounts.

The GSI is an authorisation given by a borrower who has an account in any financial institution that participated in the scheme.

The authorisation allows the creditor to recover a specified amount of money owed from any and all accounts maintained by the same borrower across all the participating financial institutions.

Essentially, this means that if a borrower owes money to a creditor, the creditor is authorised to collect the debt from any bank account the borrower holds, regardless of which participating bank it is in.

NIRSAL-MFB uploaded the TCF beneficiaries’ details, especially the names and Bank Verification Number (BVN) on the Credit Risk Management System (CRMS) owned by CBN.

The Nation gathered at the weekend that many TCF beneficiaries who cannot access credit from their banks are rushing to NIRSAL-MFB to regularise their credit status or pay off the loan.

Head of Corporate Communications of NIRSAL-MFB, Halimatu Lawal, confirmed the developments to The Nation at the weekend.

Lawal said some beneficiaries of the TCF, who have left the country now find it impossible to access credits from their banks because their identities have been uploaded on the CRMS as owing NIRSAL-MFB.

“Some beneficiaries are already demanding that their names be uploaded as performing. Even those outside the country are calling in to have their names uploaded as performing debtors. They are servicing and gradually offsetting their loans,” Lawal added.

She also explained that “those who have liquidated their loans are asking for letters of non-indebtedness and their names removed from the platform.

Lawal added that NIRSAL-MFB will “use all means to recover our money, including the GSI.”

She explained that the GSI will not touch the accounts of “those paying pack and those who have liquidated their loans”.

According to her, “since the TCF is a loan and not a grant, we are using GSI to pursue them when payment is due and we will only stop if the government tells us to stop.”

Lawal explained that NIRSAL-MFB, as a business concern, will not relent in its drive to recover the loans.

“NMFB-MFB is a business run purely like any other commercial bank that receives deposits and from the perspectives of the shareholders it is purely private,” she said.

Why we will recover our loans

Hajia Halima highlighted the reason NIRSAL-MFB (NMFB) will not relent in its drive to recover the facilities.

She said when NMFB was incorporated in 2019 and given a banking license with the following shareholding structure: Bankers’ Committee 75 percent; NIRSAL PLC 15 percent; and NIPOST 10 percent.

NMFB, she said “is a business run purely like any other commercial bank that receives deposits and from the perspectives of the shareholders it is purely private”.

Hajia Halima also spoke to the allegation of beneficiaries inducing staff of the bank before they could access the facility.

While denying the allegation, she said the bank did not engage the services of third parties or agents to market the TCF and those who were approached to induce staff of the bank should have reported the matter to the police.

“There are procedures. At no time did NMFB engage agents or third parties. If you apply online and meet our criteria, you will be given. They should report to law enforcement agents” she said.

In disbursing the N544.2 billion TCF Hajia Halima said the bank deducted a token for administrative and legal charges at source.

The NMFB spokeswoman lamented that the bank has been going through an identity crisis because of the name NIRSAL. She said many Nigerians confuse what the bank does for what the other entity NIRSAL Plc does.

According to her, “We are fully established as a bank and we have empowered Nigerians through our direct credit to the masses. NIRSAL Plc is a different entity entirely that reports strictly to the CBN.