CBN Berates Illegal Lenders Patronage, Says Microfinance Banks’ Loans Easy, Affordable

The Central Bank of Nigeria, CBN has urged Nigerians to avoid patronising illegal money lenders while drawing their attention to the great risk ahead of such transactions.

The CBN called on the citizenry to take advantage of the various schemes available to them to increase their finances through microfinance banks.

The Governor, Central Bank of Nigeria, Godwin Emefiele gave the charge at the end of the monetary policy committee meeting in Abuja on Tuesday.

Describing the activities of illegal lenders known as loan sharks, he said they operate outside the law, giving loans at extremely high interest rates and intense terms and conditions set in if there is a shift in the deadline.  

Frowning at illegal money lenders’ patronage, he said, “there is no need for you to go to loan sharks for a loan. People normally go to loan sharks because they are desperate and can’t access the bank.”

He stressed that those who take loans from platforms outside microfinance banks or recognised institutions are at great risk since they are not regulated. 

The apex bank governor noted that the central bank has made available business growth schemes through microfinance banks like the target credit facility, the SMEs loans to assist the masses. 

“We found out that those that are vulnerable are households who need money to do their businesses but they can’t access bank finance and as a result go to loan sharks who charge them way above or two times higher than the amount borrowed and expected to pay back in 90 days and if that doesn’t happen, they seize your house or bikes.

“We can only continue to advise that there is no need to go for loan sharks. The central bank has put in place the avenue through which you can raise your finance, like through the target credit facility or the SMEs loan that was set up through our microfinance banks.

“You don’t have to owe anybody, just go to the portal and fill the form, send your data, and if it’s correct, you will be able to access loans,” he said.

Commending the beneficiaries of the CBN support schemes, he stated that many people have enjoyed the services of microfinance banks, getting affordable return rates and they don’t have to owe anybody.

He, however, said that in its efforts to put an end to loan sharks’ services, CBN will go after illegal money lenders and they will be dealt with mercilessly.