By Muhammadu Sabiu
Individuals and small to medium-sized enterprises (SMEs) that have defaulted on the repayment of the N544.2 billion COVID-19 Targeted Credit Facility (TCF) are now under scrutiny as the Federal Government-owned NIRSAL Microfinance Bank (NIRSAL-MFB) takes proactive steps to recover the loans.
NIRSAL-MFB has activated its Global Standing Instruction (GSI), which will be used to recover the loans, and enlisted defaulting beneficiaries in the Central Bank of Nigeria’s (CBN) Credit Risk Management System (CRMS), preventing them from accessing further credit opportunities.
The N544.2 billion COVID-19 TCF was disbursed to aid small businesses and individuals during the pandemic. A breakdown of the funds reveals that N261.4 billion was distributed to 643,486 households, N112.5 billion to 114,476 SMEs, and N14.3 billion to 31,462 individuals through non-interest banks (NIB HH).
In addition, N2.1 billion was extended as loans to 3,523 individuals through the NIB SM scheme, while 32,355 beneficiaries received N118.4 billion under the Agric, Small and Medium Enterprise Scheme (AGSMEIS).
The Anchor Borrowers’ Programme (ABP) supported 107,035 individuals with N33.8 billion in loans, and the Nigeria Youth Involvement Fund (NYIF) assisted 5,539 recipients with N1.96 billion in funding.
All beneficiaries of the TCF, during their application process, unwittingly authorized the CBN to institute the GSI on their bank accounts.
This strategic move enables NIRSAL-MFB to deduct outstanding loan payments directly from borrowers’ accounts. This development underscores the commitment of the Federal Government to ensure that the relief funds are repaid as originally intended, and it serves as a warning to those who have neglected their repayment obligations.
Defaulting beneficiaries will now face stringent measures to recover the outstanding N544.2 billion, as NIRSAL-MFB employs the GSI and CRMS to track and prevent further access to credit.
The move by NIRSAL-MFB has prompted discussions on the importance of responsible borrowing and timely repayment of loans, especially in the context of government-backed relief programs.
It remains to be seen how this action will impact the financial standing of defaulters and whether it will serve as a deterrent to future borrowers who may consider defaulting on government-sponsored loans.