FG to Review Criteria for Disbursing N500bn Loan

The Minister of Finance, Budget and National Planning, Zainab Ahmed, has said the Federal Government will review the criteria being used by development banks in the country to disburse loans to micro, small and medium enterprises in the country to ensure geographical spread.

The minister stated this on Thursday when she appeared before the Senate ad-hoc committee set up to investigate the alleged uneven disbursement of the N500bn Federal Government loans already given out to the MSMEs by development banks.

The Senate President, Ahmed Lawan, following a motion by Senator Ali Ndume, had set up to adhoc panel chaired by Senator Sani Musa to investigate the matter.

Ndume had claimed that the South-West geopolitical zone in the country, especially Lagos State, had the largest number of beneficiaries of the loan.

The chief executive officers of the affected banks such as the Development Bank of Nigeria and the Bank of Industry had told the panel that they adhered strictly to the criteria set up by their regulators and not to geopolitical considerations in giving out loans.

Members of the committee, especially those from the northern part of the country, disagreed with the banks’ CEOs’ submissions and insisted on the review of the criteria because the development banks were established to ensure even distribution of wealth across the country.

They demanded that the loan disbursement criteria be less cumbersome so that MSMEs from all parts of the country should be able to access it.

They, therefore, decided to summon the finance minister to address their concerns.

Appearing before the panel on Thursday, the minister said, “I have been given copies of reports already submitted to the committee by the development bank. The criteria to access funds from the development banks are set by the supervising ministry. The last one was targeted at the technology sustainability plan.

Ahmed added, “If the government continues to provide intervention funds without adherence to criteria to sustain the existence of the banks, it will threaten their existence. I agree that we have to strike a balance between the survival of the banks, their profitability and the development objective of setting them up. Our ministry and the regulator, which is the CBN, will review the criteria so that we could strike a balance that would enable the banks to do more where development is much more needed.