Fakoyejo OlalekanThe Director, Development Finance of the Central Bank of Nigeria (CBN), Yusuf Yila, has disclosed that the financial regulator has began to deduct from the accounts of indebted state governments and farmers, in order to recover N700 billion.
Farmers had obtained credit under the Anchor Borrowers Programme (ABP) and Commercial Agric Credit (CAC), but they have refused to payback according to the CBN
Join our WhatsApp ChannelIt was gathered that under the ABP, the CBN gave out about N1 trillion but recovered only N400 billion, but has recovered N700 billion out of the about N800 billion the Apex bank loaned out under CAC.
All effort to enable the farmers repay has been failed, with some labelling the credit as grant. The CBN had warned last week that it will implement the Global Standing Instruction (GSI) to retrieve the debt.
The Global Standing Instruction enables a Nigerian bank to access accounts of debtors in another bank, in a bid to deduct the debt, in a situation the debtor is believed to evade repayment.
Yila revealed the new development during the post-Monetary Policy Committee (MPC) in Abuja on Wednesday, stating that every month, the monthly Federation Account Allocation Committee (FAAC) accruals are being deducted directly.
“Every person(s) or state that took that loan (ABP) is going to pay. We have their BVN.” He said, adding, “These persons are smallholder farmers, who received funds for farming from state governments via the ABP, but have yet to pay them back.”
The CBN is working with the Economic and Financial Crimes Commission (EFCC) to ensure the recovery, “We have started recovering loans from state governments. We have been doing a loan workout programme with them, and we are debiting their monthly FAAC accruals directly for the loans.
“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.
“So, every single loan that has been given out through any of our intervention programmes must be paid back.
“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.
“There is the ABP which is a primary consumption element of our interventions. We lent out N1 trillion for the ABP, of which we have gotten over N400 billion back.
“Every single person or state that took that loan (ABP) is going to pay. We have their BVN. In fact, we have started implementing the Global Standing Instruction (GSI).
“We will continue to pull the account in the bank that they lent to or whichever bank that they have. Anytime we see money in that account, we will recover it.
“We are working with the EFCC. The CBN governor has approved the collaboration with the EFCC on loan recoveries.”
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