Pressure mounts on debtors to repay N450b Fed govt loans
The collaboration between the NIRSAL Microfinance Bank (NIRSAL-MFB) and the Nigerian Financial Intelligence Unit (NFIU) aims to recover the outstanding loans of N450.9 billion issued through the Central Bank of Nigeria’s (CBN) Anchor Borrowers’ Programme (ABP). The ABP was established to create economic linkages between smallholder farmers and the market. However, a significant amount of the loans disbursed has not been repaid, prompting this joint effort to ensure compliance and recovery of the funds.
The NFIU has committed to providing intelligence support to identify defaulters and aid in the recovery process. This move indicates a more aggressive approach to recovering outstanding loans and underscores the government’s commitment to recouping these funds. The use of Global Standing Instructions (GSI) has also been mentioned as an effective tool in this recovery effort, allowing the creditor to debit the accounts of a debtor across financial institutions.
He explained that “N1.12 trillion was disbursed to 563 anchors,” of which about N670.4 billion” has been repaid.
The NFIU, according to the source, is providing ‘intelligence’ to NIRSAL-MFB to ensure the balance of N450.9 billion was recovered.
His words: “NIRSAL Microfinance Bank and NFIU collaboration is targeted at recovering loans taken by anchor borrower beneficiaries who are defaulting in repayment. This collaboration indicates a more aggressive approach to recovering outstanding loans.
‘’We are determined to recover the N450 billion balance from beneficiaries reluctant to pay back. This shows that the government is committed to recouping these funds.”
The source added the use of Global Standing Instructions (GSI) made many beneficiaries who hitherto were foot-dragging to begin payment.
‘’Many beneficiaries have started repaying what they borrowed not because they wanted to but because of the fear of the GSI, a service of last resort employed by a bank to recover outstanding debts from customers who borrow money and default.
‘’You also know that the instrument also allows the creditor to debit the accounts of a debtor in any financial institution he has funds in.
“ So, the GSI trigger is one of our best instruments. Anywhere you have money in the world we will collect it. Even Nigerians who have left the country cannot escape repayment obligations.”
The official, who acknowledged that some borrowers face challenges in paying back, said that a “self-loan liquidation app” launched by the bank now allows them to “liquidate their loans themselves” online.
The ABP was established in November 2015 to create economic linkages between Small Holder Farmers (SHF) and Anchors.
Overall, the programme benefitted about 4.67 million farmers involved in either maize, rice, or wheat farming before it was jettisoned.
Some of the major beneficiaries are the Rice Farmers Association of Nigeria (RIFAN) which received N283.01 billion on behalf of 1,518,603 members to cultivate about 1,403,990 hectares of land; AFEX commodities, N169.27 billion for 483,476 farmers for the cultivation 865,258 hectares of land and THRIVE Agric, N92.07 billion for 305,000 farmers who cultivated 501,000 hectares of land.
