Nigerian banks have embarked on the process of reclaiming loans disbursed to individuals and businesses as part of the COVID-19 relief efforts. The unexpected deductions from the accounts of loan beneficiaries have sparked surprise and concern, with some reporting significant amounts being withdrawn without prior notification. The move follows the Central Bank of Nigeria’s directive to commercial and merchant banks to initiate debits for various loan defaulters.
Beneficiaries of the COVID-19 support loans have expressed surprise at the sudden deductions from their accounts. Some reported receiving grants, while others claimed to have been approached by agents during the loan disbursement process.
Several affected individuals, such as Yinka, shared their experiences of sudden debits, causing financial strain on their families. Yinka, who received a N200,000 COVID-19 grant, had N750,000 debited from her account without prior warning, leaving her family financially insolvent.
Reports indicate that some beneficiaries were approached by supposed agents who facilitated the loan disbursement in exchange for fees. Onuche Isaiah claimed to have paid N250,000 and N150,000 to agents for a N1 million loan, only to be deducted over N350,000 unexpectedly. The controversial deductions have left some borrowers seeking ways to repay the remaining amounts.
The Central Bank of Nigeria, through commercial banks, disbursed COVID-19 support loans in 2021 to households and Micro, Small, and Medium-Sized Enterprises (MSMEs) affected by the pandemic. The NIRSAL Microfinance Bank oversaw the fund, charging applicants five percent of the total amount, with a moratorium that expired on February 28, 2021.
Also, President Bola Tinubu’s proposal to securitize the outstanding N7.3 trillion Ways and Means has received approval from the Senate. Ways and Means, a method employed by the Federal Government to raise funds through borrowing from the Central Bank of Nigeria, is set to undergo changes, impacting the country’s financial landscape.
The surprise deductions and controversies surrounding the loan recovery process highlight the challenges faced by individuals and businesses in navigating the economic fallout from the COVID-19 pandemic. The government’s efforts to address these issues and provide financial relief continue to evolve, with implications for the broader economic recovery.