COVID-19 TCF/AGSMEIS Loan: Why CBN Is Slowing Down On Intervention Loan Approval
The COVID-19 Targeted Credit Facility Loan, the AGSMEIS Loan, or the Anchor Borrowers Program are just a few of the intervention programs the Central Bank of Nigeria (CBN) has mandated that everyone who has taken out a loan under must repay it.
This was revealed on Wednesday at the post-MPC briefing of the 287th meeting of the CBN Monetary Policy Committee and the disclosure of facts behind the figures, held in Abuja, by Dr. Yusuf Yila, Director of the CBN Development Finance Department.
Dr. Yila pointed out that the CBN has already recovered N3.7 trillion of the N9.3 trillion it loaned to various economic sectors as part of its development intervention programs.
Due to the current moratorium, he emphasized that loans totaling over N5 trillion were still outstanding. He added that the Bank would make sure to reclaim every outstanding loan and would use the worldwide standing instruction and bank verification numbers to do so.
According to Dr. Yila, the recipients’ bank verification numbers are on file with the apex bank, which means it is simple to withdraw money from any of their bank accounts to pay back the loan.
“Every single person who had taken loans, even for farming is going to pay. We have their Bank’s Verification Number (BVN). 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 way, the 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 six months, 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.”
Dr. Yila also said that in order to control excess liquidity in the economy, the apex bank would reduce future developmental finance operations.