✕ CLOSE Online Special City News Entrepreneurship Environment Factcheck Everything Woman Home Front Islamic Forum Life Xtra Property Travel & Leisure Viewpoint Vox Pop Women In Business Art and Ideas Bookshelf Labour Law Letters

FG to review criteria for MSME loans

The federal government on Thursday said it would review the criteria being used by the Nigerian development banks to disburse loans to Medium and Small-Scale…

The federal government on Thursday said it would review the criteria being used by the Nigerian development banks to disburse loans to Medium and Small-Scale Enterprises (MSMEs) to ensure geographical spread.

The Minister of Finance, Budget and National Planning, Zainab Ahmed, disclosed this when she appeared before the Senate ad-hoc committee probing the alleged uneven disbursement of the N500 billion loans given out to the MSMEs by Development Bank of Nigeria (DBN).

The senate, following a motion by Senator Ali Ndume, had set up the ad-hoc panel to investigate the claim that the South West, especially Lagos State, had the largest number of loan beneficiaries.

The chief executive officers of the affected banks like 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 geopolitical considerations in giving out loans.

Why food prices remain high – FG

Why food prices remain high – FG

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

The finance minister told the lawmakers that she would meet with the development banks’ management and their regulators – the Central Bank of Nigeria – to carry out the review of the criteria for loan disbursement.

Ahmed, however, said the review would be done in a way that the sustainability of the development banks would be ensured.

The minister said, “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, the regulator, which is the CBN, will meet to review the criteria so that we could strike a balance that will enable the banks to do more where development is needed.”