CBN raises alarm over unpaid ₦261bn COVID-19 SME loans

A document from the Central Bank of Nigeria (CBN) has shown that some beneficiaries of the COVID-19 funds issued under the CBN and NIRSAL Microfinance Bank’s Targeted Credit Facility (TCF) have failed to make refunds.

The CBN in 2020, introduced the TCF with a ₦50 billion package to cushion the effect of the economic meltdown during the COVID-19 era. The TCF was created to support households and micro, small and medium enterprises (MSMEs).

The CBN document further stated that out of the ₦419.42 billion disbursed, the total amount of principal repayments was ₦41.39 billion, and interest repayments stood approximately at ₦174.60 million.

Further breakdown also showed an outstanding amount of roughly ₦378.03 billion, while the overdue repayment stood at ₦261.07 billion.

The TCF as expected, created 1,585,872 direct and indirect jobs, contributing to Nigeria’s employment landscape and also supported 792,936 beneficiaries across the country comprising 117,964 small businesses and 674,972 households.

According to the CBN document, 10 SMEs who received ₦2.5 million each from the facility were sighted as the top beneficiaries.

Out of the 10 beneficiaries, nine have been labeled ‘non-performing’, with one of the defaulting companies repaying as low as just ₦8,302.35 out of the ₦2.5million loan.

Only one company, Centriculture Limited, was labeled as ‘performing’, with a repayment of ₦1,000,000.00.

The FG-owned NIRSAL Microfinance Bank (NIRSAL-MFB), in a bid to recover the bad loans, activated its Global Standing Instruction (GSI) last year. With this, the financial institution enabled direct debits from the defaulting customers’ bank accounts.

NIRSAL also went ahead to upload details of all defaulting beneficiaries on the CBN’s Credit Risk Management System (CRMS) to stop them from accessing credits anywhere in the world.