By Bassey Udo
Amid the debate whether or not Nigerians should pay back the loans received from NIRSAL Micro-Finance Bank to cushion the impact of COVID-19 pandemic on small businesses,
Senator Ayo Akinyelure has expressed doubts the government can recover the loans.
Akinyelure who is the Chairman of the Senate Committee on Ethics, Privileges and Public Petitions, spoke when the Managing Director of NIRSAL Microfinance Bank, Abubakar Abdullahi Kure, appeared before the National Assembly on Tuesday to brief members on the workings of the bank.
To avoid derailing the mandate of the bank to continue to provide succour to Nigerians whose businesses were negatively impacted by the COVID-19 pandemic, the lawmaker called for an arrangement that would give more time to those who got the loans to payback, while more funding was given to NIRSAL to continue advancing credits to more micro, small and medium enterprises (MSMEs) in the country.
The Senator representing Ondo Central senatorial District in the National Assembly, who criticised NIRSAL Bank management over its loans disbursement criteria, expressed doubts that over N500 billion loans to both the MSMEs and households funding would be recovered.
“To me NIRSAL gave out these monies as grants to Nigerians, because I don’t see how you are going to be able to recover over N500 billion based on the criteria required for the acquisition of these loans.
“Since recovering this money will be difficult for NIRSAL, because of the time it was disbursed, let’s request that the CBN (Central Bank of Nigeria) gives them fresh funding, so they can give out to other persons that they will be able to recover from with at small interest rate. The money (about N188 billion) outside is gone. We can’t wait until it is recovered before another fund can be disbursed to NIRSAL to continue its mandate.
“Some countries like the US gave their citizens free money over four times. So, for this agency to meet its loaded objectives, fresh funds should be released to them,” he said.
He called on the management of NIRSAL to come forward with recommendations on the way forward that it feel could enlighten the law makers on the matter, to help make recommendations to the Senate for consideration.
The lawmaker who said the criteria under which the loans were granted to beneficiaries by NIRSAL made recovery difficult, said regardless the agency still needed to be encouraged to continue, by being given more funding, since one of the major setbacks they had was COVID 19.
He acknowledged the NISRAL objective to be a good one, with advantages over other microfinance banks.
On the operational structure of NIRSAL, Akinyelure suggested that its creation should be detached and differentiated from CBN as the regulatory authority for the financial sector, adding that it was not wise for NIRSAL to put itself in a position to work with micro and macro sectors of the economy.
“CBN register microfinance houses to be able to spread loans to the local level. What NISRAL is doing with a national certificate conflicts with what the commercial and development banks are doing,” he said.
He promised to make a positive recommendation for an amendment of the enabling law to the Senate, particularly on the need to divorce its source of funding from the Bankers’ Committee of the CBN and establish fresh criteria for its operations.
