CBN Begins Debiting Accounts of Nigerians to Recover N50bn COVID-19 Loans

CBN Initiates Debt Recovery: Nigerians’ Accounts Debited to Retrieve N50bn COVID-19 Loans

In a significant financial development, the Central Bank of Nigeria (CBN) has launched an ambitious drive to recover approximately N50 billion in COVID-19 loans. This endeavor targets beneficiaries of the Targeted Credit Facilities (TCF) initiated by the CBN in 2020, aimed at mitigating the economic impact of the COVID-19 pandemic. The move has taken many beneficiaries by surprise, leading to complaints about arbitrary deductions from their bank accounts.

The Unforeseen Consequences for Beneficiaries

Some of the loan beneficiaries, taken aback by the sudden deduction, have expressed their dissatisfaction with the CBN’s approach to loan recovery. One such beneficiary, Fatimah Alli, shared her ordeal. She received a loan of N500,000 in 2020 to alleviate the financial strain caused by the COVID-19 pandemic. At the time of receiving the loan, she was assured that beneficiaries would not be required to repay it. However, she recently discovered that the CBN had wiped out all the funds in her bank account as part of the loan recovery process.

Another borrower, Abbas Sule, revealed that he experienced arbitrary debiting of his account by the CBN. He disclosed that, in order to access the N500,000 loan, he had to pay N50,000 to a staff member of NIRSAL Microfinance Bank (NMFB), the channel through which the CBN disbursed the loans. Abbas expressed concern over the CBN’s decision to demand the repayment of the entire N500,000 loan when he had only received N450,000.

NIRSAL’s Call for Loan Repayment

NIRSAL Microfinance Bank has recently initiated efforts to recover the loans from beneficiaries across the country. The CBN disbursed approximately N50 billion under the TCF to provide support to households and businesses during the challenging economic times brought on by the COVID-19 pandemic, which had devastating effects on economies worldwide. The initial loan interest rate was set at five percent, with a moratorium period in place until February 28, 2021.

After the moratorium period ended, the loan interest rate increased to nine percent starting from March 1, 2021. NIRSAL Microfinance Bank, via social media, called upon loan beneficiaries to begin the repayment process immediately. They emphasized the necessity of maintaining continuous funding in the loan accounts.

“You must ensure that your loan account is continuously funded,” NIRSAL stated.

Tinubu’s Directive for Loan Recovery

In related news, President Bola Tinubu issued directives to security agencies to launch an aggressive recovery effort for the CBN’s Anchor Borrowers’ Programme loans, which were granted under the leadership of former CBN Governor Godwin Emefiele. The President set a deadline of September 18, 2023, for security agencies to recover the outstanding N1.1 trillion Anchor Borrowers’ programme loans.

CBN has reported that slightly over N500 billion of the loan has been repaid by farmers, leaving a substantial outstanding amount of over N500 billion.

CBN and NMfB Joint Efforts in Loan Recovery

Additionally, the Central Bank of Nigeria (CBN), in collaboration with NIRSAL Microfinance Bank (NMfB), has embarked on an extensive loan recovery initiative by scrutinizing the accounts of debtors. This proactive measure aims to retrieve loan facilities provided under the Targeted Credit Facility (TCF) and the Agric, Small Medium Enterprises Scheme (AGSMEIS).

As part of this joint effort, many Nigerians have received debit alerts from their banks, including those whose Bank Verification Numbers (BVN) are linked to their accounts. This collective endeavor by the CBN and NMfB reflects their commitment to ensuring that loan facilities are recovered from defaulting beneficiaries.

Conclusion

The Central Bank of Nigeria’s pursuit of loan recovery underscores the importance of financial responsibility and accountability. While some beneficiaries have expressed their grievances, the CBN’s actions reflect the need to uphold the integrity of loan agreements and maintain financial stability. As this recovery process unfolds, it serves as a reminder of the economic challenges faced during the COVID-19 pandemic and the measures taken to address them.

Frequently Asked Questions

1. Why is the CBN recovering COVID-19 loans from beneficiaries?
   • The CBN is recovering COVID-19 loans to ensure that beneficiaries meet their repayment obligations and maintain the financial integrity of loan agreements.
2. What is the Targeted Credit Facilities (TCF)?
   • The TCF is a loan program initiated by the CBN to provide financial support to households and businesses affected by the economic impact of the COVID-19 pandemic.
3. Why are some beneficiaries dissatisfied with the loan recovery process?
   • Some beneficiaries are unhappy with the unexpected deductions from their bank accounts and the discrepancy between the loan amount received and the repayment demand.
4. What role does NIRSAL Microfinance Bank play in loan recovery?
   • NIRSAL Microfinance Bank is responsible for loan disbursement and has initiated efforts to recover loans from beneficiaries, emphasizing the importance of timely repayments.
5. What is the Anchor Borrowers’ Programme, and why is it being targeted for recovery?
   • The Anchor Borrowers’ Programme is a CBN initiative aimed at providing loans to farmers. It is being targeted for recovery due to outstanding loan amounts that need to be repaid by beneficiaries.