The managing director of NIRSAL Microfinance Bank (NMFB), Alh. Abubakar Kure, has vowed that the Bank Verification Number (BVN) of COVID-19 loan defaulters will be blocked.
In an interview, the NMFB boss disclosed that Global Standing Instruction (GSI) would be implemented on bank accounts of loanees after the end of the moratorium and deduction would be effected.
As one of the ways to support businesses and individuals who were affected by the outbreak of COVID-19 in 2020, the Central Bank of Nigeria (CBN) rolled out several credit facilities to mitigate the impact of the pandemic.
While Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) is wholly owned by Nigeria’s apex bank, NMFB is jointly owned National microfinance bank with 50 percent stake by the bankers committee, 40 percent stake by NIRSAL Plc while 10 percent goes to NIPOST.
Abubakar said NMFB has the right to blacklist the BVN of anyone who failed to repay, saying, “With that, the person will not be able to transact any business in the banking sector, can’t even use the ATM and cannot transfer funds,” he was quoted in the vanguard interview.
The NMFB, who stated that NMFB received over nine million loan applications, pointed out that the objective of the Nirsal MFB loan was to remove the challenges operators of small businesses face in obtaining credit facilities from the Deposit Money Banks.
He said the idea behind NMFB was borne out of the CBN’s economic policy to remove the bottlenecks of accessing loans since Small and Medium Enterprises are the engine of economic growth.
“That is why we say that people who have genuine intentions of doing business should come forward and take loans at very low rates and help themselves out of poverty and help to grow our economy,” he said.
NIRSAL-COVID-19 has the lowest interest rate in the history of credit facilities in Nigeria. It comes with five percent and nine percent interest rates, depending on when you obtained the loan.
“The rate is low and the risk profile is also lowered so that people at the very bottom of the ladder can qualify to also obtain it. There is no bank that will give you money at 5 percent rate in this country.”
The categories
Specifically, CBN-supported Targeted Credit Facilities come in different forms. The major one is Agric Business Small and Medium Investment Scheme also known as AGSMIES loan.
In the AGMIES loans, 70 percent goes into equipment while the rest goes into working capital so that the funds are used for the purpose it was designed to achieve. The bank also has TCF non-interest banking facility.
At the time of this report, some Nigerians are still facing challenges of accessing the loan. Some of them whose accounts were credited had issues transferring the fund from NMFB account to their conventional bank account through which withdrawal can be made.
Even some applicants still check if their COVID-19 loan application has been approved by using their BVN.
Plead for repayment
Pleading to those who obtained the loan, the NMFB boss pointed out that a loan isn’t a “national cake” as being circulated by those who had planned not to repay the loan.
He said they should see their access to NIRSAL or COVID-19 loans as a privilege to have funds to boost their businesses and urge them to repay so that other SME owners can have access to the same opportunity.
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