CBN Starts Debiting Defaulters of Its Intervention Loans

The Central Bank of Nigeria (CBN) has begun debiting the account of intervention loan defaulters.

The apex bank declared this at the last Monetary Policy Committee (MPC) meeting held in Abuja. It further noted that States Governments and smallholder farmers form a large part of the defaulter. 

It will be recalled that the Central Bank disclosed in August that about N791 billion was disbursed to more than 3 million farmers under the Anchor Borrowers’ Program (ABP) and Commercial Agric Credit. 

ABP was launched by Muhammad Buhari on November 17, 2015 to assist Smallholders Farmers. ABP was created to reduce the pains faced by farmers in accessing credit for their operations. It had a single interest rate of nine percent.

Some of the benefiting smallholder farmers are those engaged in the production of rice, maize, wheat, cotton, cassava, potatoes, yam, ginger, oil palm, cocoa, rubber tomatoes, fish and poultry among others.

According to the director of development finance of the CBN, Yusuf Yila, state governments’ monthly federation account allocation committee (FAAC) accruals are already being debited directly every month. He however did not specify the states involved.

“Every person(s) or state that took that loan (ABP) is going to pay. We have their BVN. These persons are smallholder farmers, who received funds for farming. We have started recovering loans from state governments. We have been doing a loan workout programme with them, and we are debiting their monthly Federal Allocation Account (FAAC) accruals directly for the loans”, he stated.

“If a state government has taken N1 billion and is already in default, over six months, we debit them N150 million every month. So, we’ve started that programme.” He continued. So, every single loan that has been given out through any of our intervention programmes must be paid back.” He added

Yila, also mentioned that the CBN has put sentiment aside and is determined to collect the money it is owed. 

 “There is absolutely no mercy. We have started; we are in recovery mode. At the development finance department, we have begun to recover the loans”, he stated.