By Kasim Isa Muhammad
The Nigerian Senate has launched an investigation into the allegations of uneven distribution of intervention loans amounting to N483 billion by Development Financial Institutions (DFIs) across the country’s six geopolitical zones.
The probe is being conducted by a 7-member Ad-hoc Committee led by David Umahi, with other senators serving as members.
The investigation was initiated following a motion presented by Senator Ali Ndume which was supported by 64 other senators.
It could be recalled that The Citizen Reports has, in October 2022 broken this news after conducting a thorough data investigation into the DBN’s annual statutory report published last year – Read full report here
The motion called for a comprehensive inquiry into the disbursement of loans to micro, small, and medium-scale enterprises (MSMEs) by the Development Bank of Nigeria, NIRSAL, and related banks from 2015 to the present.
During the Senate’s deliberation, it was observed that there was a disparity in the allocation of N500 billion to states in the six geopolitical zones.
According to the Bank’s Annual Integrated Statutory Report for 2021, only 11 per cent of the disbursed loan amount went to the 19 states in Northern Nigeria, while 47 per cent went to Lagos state alone.
The breakdown of the loan distribution showed that the South West received 57 per cent, the South-South received 17 per cent, the North Central received 11 per cent, the South East received 9 per cent, the North West received 5 per cent, and the North East received 1 per cent.
Similarly, Senator Seriake Dickson proposed expanding the investigation to include all intervention loans provided by the Central Bank of Nigeria (CBN), such as Covid-19 palliatives and Anchor Borrowers loans.
However, the suggestion was dropped to keep the ad-hoc committee’s work manageable.
In its discussion, the Senate revealed that loans are granted based on applications and fulfilment of requirements, including bank guarantees.
Also, Senator Olamilekan Adeola noted the importance of recognizing the established procedures for loan disbursement by development financial institutions, even if some senators felt disadvantaged.
Senator Sani Musa, who previously chaired the ad-hoc committee, explained the difference between bank loans and palliatives and mentioned that 65 per cent of loans disbursed by the Development Bank of Nigeria (DBN) have been repaid.
While Senator Ndume, who raised the motion, claimed to have obtained the information from the DBN’s and microfinance institutions’ websites, disagreeing with the presented facts.
Senator Isah Jibril, a financial expert, pointed out that the DBN and other institutions have foreign partners like the World Bank and IMF, which have their criteria.
He suggested that Nigerians who do not meet up the requirements should explore other less burdensome institutions such as the Bank of Industry and the Bank of Agriculture.
According to the report, the investigation panel aims to unveil the allegations of uneven loan disbursement and ensure transparency in the process.
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