FG to review criteria for disbursing N500bn loan

Zainab Ahmed, Minister of Finance, Budget, and National Planning, stated that the Federal Government will review the criteria used by development banks in the country to disburse loans to micro, small, and medium-sized firms in order to ensure geographical diversity.Information Guide Nigeria

This was disclosed by the minister on Thursday, when she testified before an ad hoc Senate committee investigating the alleged uneven disbursement of the N500 billion in Federal Government loans previously disbursed to MSMEs by development banks.

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In response to a move by Senator Ali Ndume, Senate President Ahmed Lawan convened an ad hoc committee under the leadership of Senator Sani Musa to investigate the situation.

Ndume asserted that the South-Western geopolitical zone of the country, and particularly the state of Lagos, had the greatest number of loan recipients.

The chief executive officers of the impacted banks, including the Development Bank of Nigeria and the Bank of Industry, told the panel that they adhered closely to the standards established by their authorities and did not take geopolitical considerations into account when granting loans.NYSC portal

Members of the committee, particularly those from the north of the country, disagreed with the bank CEOs’ arguments and pushed for a reevaluation of the criteria because the development banks were founded to ensure an equitable distribution of wealth throughout the nation.JAMB portal

They urged that the conditions for loan disbursement be simplified so that MSMEs from all regions of the country may access it.

Therefore, they agreed to summon the minister of finance to discuss their concerns.

Appearing before the panel on Thursday, the minister said, “I have been given copies of reports already submitted to the committee by the development bank. The criteria to access funds from the development banks are set by the supervising ministry. The last one was targeted at the technology sustainability plan.

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Ahmed added, “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 and the regulator, which is the CBN, will review the criteria so that we could strike a balance that would enable the banks to do more where development is much more needed.JAMB Result

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