Senate revisits ‘uneven’ disbursement of N483bn intervention loan…sets up 7- man ad-hoc committee to investigate allegation

By Haruna Salami

The Senate on resolved to revisit an alleged uneven disbursement of intervention loans to the tune of N483 billion by development financial institutions among the six geopolitical zones in the country.

The upper chamber therefore raised a 7-man Ad-hoc Committee to carry out a holistic investigation into the matter and report back to it in four weeks for further legislative action on Wednesday.

The Ad-hoc Committee is chaired by Senator David Umahi with Senators Babangida Oseni, Ali Ndume, Sani Musa, Tokunbo Abiru, Ipalibo Banigo and Chizoba Chukwu as members.

The decision followed the debate of a motion by Senator Ali Ndume (Borno South) which was supported by 64 other senators on the need to holistically investigate the disbursement of loans by Development Bank of Nigeria, NIRSAL and related Banks to micro, small and medium scale enterprises (MSMEs) in Nigeria from 2015 to date.

Recalled the same motion by Ndume and three others was investigated by an Ad-hoc committee in the 9th Senate and a report was submitted by the panel headed by Senator Sani Musa (Niger East).

Deliberating on the motion at plenary Wednesday, the Senate noted that the huge disparity and un-even distribution of half a trillion naira to states in the six geopolitical zones of Nigeria and the states in the country in 2021 by the Development Bank of Nigeria .

“Aware that the Bank’s Annual Integrated Statutory Report 2021obtsined on 13th July, 2022 from the organisation’s website showed that the Bank disbursed a loan worth Four Hundred and Eighty Three Billion Naira (N483,000,000,000) only out of which only 11 percent went to the 19 states of Northern Nigeria, while 47percent went to Lagos State alone.

“Also aware that the 13 percent of the loan that went to the North totals about about Fifty Three Billion , One Hundred and Thirty Million Naira (N53,130,000,000) while the 47 percent that went to Lagos State alone totals Two Hundred and Twenty Seven Billion and Ten Million Naira (N227,010,000,000) only..”

According to the breakdown of the loan presented by Sen Ndume, “the South West got 57 percent worth N274,740,000,000; South South got 17 percent worth N81,940,000,000; North Central got 11 percent worth N53,020,000,000; South East got 9 percent worth N43,380,000,000; North West got 5 percent worth N24,100,000,000; North West and North East got just One percent worth N4,820,000,000.”

Recall that the Development Bank of Nigeria exists to alleviate financing constraints being faced by Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria through providing finances , partial credit guarantees and technical assistance to eligible financial intermediaries on a market – conforming and fully financially sustainable basis.

Ndume also noted that the top five sectors considered for the loan were oil and gas (42.0 percent), manufacturing (16.0 percent), agriculture, forestry and fisheries (7.2 percent), trade and commerce (6.3 percent), and transportation and storage (3.5 percent),

However, there was mild drama as senators took time to dissect the motion.

Seriake Dickson (PDP Bayelsa West) while suggesting an additional prayer said that the Ad-hoc Committee investigation should be extended to look at all intervention loans by the CBN including “Covid-19 palliative, Anchor Borrows loan etc”.

But the additional prayer was dropped on the pretext that will make the assignment of the Ad-hoc committee unending.

Contributing earlier, Sen. Orji Kalu (Abia North) said loans are gotten upon application and following satisfaction of requisite requirements, including bank guarantees.

Olamilekan Adeola (Ogun West) said Ndume had the notion that his North East zone was short changed, but forgot that the development financial institutions had laid down procedures to disburse loans and appealed that the motion be given a second look if Ndume felt bad about the facts.

Sen. Sani Musa (Niger East) who headed the former Ad-hoc committee said it should be noted that “there is difference between bank loans and palliatives” .

While agreeing that development institutions have criteria for granting loans, he said the institutions might not have strictly followed them.

He disclosed that 65 percent of loans disbursed by DBN has been repaid.

Musa also said interest of northerners in applying for the loan may be restricted by religious belief that no interest should be paid on loans while financial institutions take 17 percent interest on loan.

But Ndume interjected him saying he perfectly understood workings of development institutions and their requirements, but claimed he got information presented from the website of the DBN and microfinance institutions involved.

A financial expert and retired banker, Sen. Isah Jibrin advised that the DBN among other institution is not wholly Nigerian institution but has foreign bodies like the World Bank and International Monetary Fund (IMF) as investment partners and they have their criteria which cannot be compromised by the Nigerian system.

He advised that Nigerians that failed to meet such requirement should approach other less cumbersome institutions such as the Bank of Industry and Bank of Agriculture.