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CBN recovers N3.7trn from loan defaulters, to prune interventions

The Central Bank of Nigeria (CBN), said it has recovered about N3.7 trillion out of the N9.3 trillion it lent to different sectors of the economy under its development interventions programme.

The Director, Development Finance Department, Dr Yusuf Yila, disclosed this on Wednesday in Abuja, at the post-MPC briefing of the 287th meeting of the CBN Monetary Policy Committee and unveiling of facts behind the figures.

This is even as the apex bank said it will scale down on such intervention programmes to reduce the quantum of money in circulation, and focus on just two critical sectors of the economy – the Micro, Small and Medium Enterprises (MSMES), and power.

Yila noted that over N5 trillion worth of loans are not yet due because of the subsisting moratorium, adding that CBN will ensure that it recovers every outstanding loan.

He said: “Every single person who has taken a loan, even for farming, is going to pay; we have their Bank’s Verification Number (BVN). In fact, we started what we call the Global Standing Instruction (GSI), and will continue to pull their accounts in the banks that they lend to, or whichever bank that they have an account. Anytime we see any fund from a loan defaulter, we will recover the money from the account.

“We have also started recovering those loans from state governments. We have been doing a long workout programme on them. Any state government that has benefitted from our fund and is already in default, over a six-month period, we’re going to be debiting them at N50 million every month, and we have started that programme.

“So every single loan obtained from our intervention programme must be paid back. There’s absolutely no mercy. We have kick-started, and are in recovery mode.

“Talking about the portfolio, most of it is quite securitized. Where we are at risk, really is around the Micro, Small and Medium Enterprises (MSMEs). One of our best-performing interventions is the commercial agriculture scheme.”

Also contributing, the CBN Director of Monetary Policy, Dr Hassan Mahmud, defended that the radical raise in interest rate and the Cash Reserve Ratio (CRR), announced on Tuesday, was to check the inflationary pressure, which was a major source of concern to the Bank.

Admitting that the increases will increase the cost of funds and hinder growth, he however argued that taming inflation was a priority, as doing otherwise was capable of rendering any growth valueless.

In fact, we started what we call the Global Standing Instruction (GSI), and will continue to pull their accounts in the banks that they lend to, or whichever bank that they have an account. Anytime we see any fund from a loan defaulter, we will recover the money from the account.

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