Intensified Efforts to Recover Loans from COVID-19 TCF Repayment Defaulters

COVID-19 TCF Repayment Defaulters. In a determined move to address the issue of loan defaulters, especially those who have defaulted in the repayment of the substantial N544.2 billion COVID-19 Targeted Credit Facility (TCF), the Federal Government-owned NIRSAL Microfinance Bank (NIRSAL-MFB) has taken significant steps. This credit facility was extended to small and medium enterprises (SMEs) and individuals during the challenging times of the COVID-19 pandemic.

At the forefront of this initiative is the activation of the Global Standing Instruction (GSI) by NIRSAL-MFB. The GSI is a mechanism that empowers lending institutions to recover loans by debiting the defaulters’ bank accounts. It is a proactive measure to address the issue of non-repayment and to safeguard the financial interests of the government and participating financial institutions.

Furthermore, NIRSAL-MFB has shared the details of all individuals and entities that have defaulted on their TCF loans with the Central Bank of Nigeria’s (CBN) Credit Risk Management System (CRMS). This strategic move ensures that defaulting beneficiaries are flagged in a comprehensive financial database, making it virtually impossible for them to access any further credit facilities, not only within the country but anywhere in the world.

The N544.2 billion TCF program was designed to support various sectors severely impacted by the COVID-19 pandemic. Out of this substantial amount, N261.4 billion was disbursed to 643,486 households, providing a vital financial lifeline during these challenging times. A total of N112.5 billion was directed to 114,476 Small and Medium Enterprises (SMEs), enabling them to sustain their operations and retain employment.

Additionally, N14.3 billion was extended to 31,462 individuals through non-interest banks (NIB HH), offering crucial financial relief to those who needed it most. A separate NIB scheme, the NIB SM, facilitated loans worth N2.1 billion to 3,523 individuals, further broadening the reach of the TCF program.

The agriculture sector received considerable support, with 32,355 beneficiaries obtaining N118.4 billion through the Agric, Small and Medium Enterprise Scheme (AGSMEIS). Furthermore, the Anchor Borrowers’ Programme (ABP) provided N33.8 billion in loans to 107,035 recipients, reinforcing the government’s commitment to bolstering agricultural productivity.

In its quest to empower the youth, the Nigeria Youth Involvement Fund (NYIF) channeled N1.96 billion in loans to 5,539 individuals, fostering entrepreneurship and innovation among the younger generation.

It is important to note that all beneficiaries of the TCF program, when applying for the facility, inadvertently authorized the Central Bank of Nigeria to institute the GSI on their bank accounts. This authorization serves as a critical tool for loan recovery, ensuring that those who benefitted from the COVID-19 TCF are held accountable for their repayment obligations.

In summary, the government, through NIRSAL-MFB, has intensified its efforts to recover the N544.2 billion COVID-19 TCF loans. The activation of the GSI and the sharing of defaulters’ information on the CRMS underscore the commitment to fiscal responsibility and the safeguarding of public funds. These measures serve as a clear signal that loan defaulters are under close scrutiny, and the government is determined to recover the funds to continue supporting those in need during these challenging times.