FG To Review Criteria For MSME Loans

To maintain geographical diversity, the federal government announced on Thursday that it would evaluate the criteria used by Nigerian development banks to distribute loans to Medium and Small-Scale Enterprises (MSMEs).Information Guide Nigeria

The Minister of Finance, Budget, and National Planning, Zainab Ahmed, said this when she appeared before the Senate ad-hoc committee investigating the alleged uneven allocation of the N500 billion in loans issued by Development Bank of Nigeria to MSMEs (DBN).

In response to a resolution by Senator Ali Ndume, the senate established an ad hoc group to investigate claims that the South West, particularly Lagos State, had the highest number of loan recipients.

The chief executive officers of the impacted banks, such as the Development Bank of Nigeria and the Bank of Industry, informed the panel that they rigorously adhere to the standards established by their authorities and did not consider geopolitical factors when granting loans.NYSC portal

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Members of the committee, particularly those from the North, disagreed with the bank executives’ arguments and pushed on a reevaluation of the criteria, as the development banks were founded to ensure an equitable distribution of wealth throughout the nation.JAMB portal

The finance minister informed the MPs that she will meet with the management of the development banks and their regulators — the Central Bank of Nigeria – to examine the loan disbursement criteria.
Ahmed stated that the assessment would be conducted so as to ensure the viability of the development banks.

The minister said, “If the government continues to provide intervention funds without adherence to criteria to sustain the existence of the banks, it will threaten their existence. I agree that we have to strike a balance between the survival of the banks, their profitability, and the development objective of setting them up.

“Our ministry, the regulator, which is the CBN, will meet to review the criteria so that we could strike a balance that will enable the banks to do more where development is needed.”JAMB Result

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