Senate investigates DBN’s uneven disbursement of N500bn loans –
The Senate has set up an ad hoc committee to investigate the alleged unequal disbursement of a N500 billion loan to the six geopolitical zones by the Development Bank of Nigeria (DBN).
The Upper Legislative Chamber, in its resolutions on a motion to that effect by Ali Ndume (APC Borno South) and co-sponsored by Ibrahim Bomai (APC Yobe South) on Wednesday, specifically urged the bank to ensure fair disbursement of the loan to all areas and also extend its facilities beyond the sectors already captured.
The top five sectors considered for lending are oil and gas (42%), manufacturing (16%), agriculture, forestry and fishing (7.2%), trade and commerce (6. 3%) and transport and storage (3.5%).
Senate Vice President Ovie Omo-Agege, who chaired the plenary, appointed Senate Banking, Insurance and Other Financial Institutions Committee Chairman Sani Musa as chairman of the ad hoc committee while Ibrahim Danbaba ( North West) ; Ayo Akinyelure (South West); Mathew Urhoghide (South South); Ali Ndume (Northeast); Uche Ekwunife (South East) and Sadiq Umar from Central North as members.
The Committee had two weeks to make its findings and report back to the plenary.
Introducing the motion, Ndume had alleged huge disparity and unequal disbursement of the N500b loan to the six geopolitical zones and states of the country in 2021 by the DBN.
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He specifically mentioned Lagos State as the main beneficiary with 47% of the total loan, while the entire Northern region got 11%.
The legislator said: “The bank’s 2021 annual integrated statutory report obtained on July 13, 2022, from the organization’s website, showed that the bank was able to disburse a loan worth 483 billion only naira, of which only 11% went to Nigeria’s 19 northern states. while 47% went to Lagos State alone.
“The 11% of the loan that went to the North totals about 53.130 billion naira and the 47% that went to Lagos State alone only totals 227.010 billion naira.”
Ndume expressed concern that “loans were extended to the six geopolitical zones, where data showed that the South West took the lion’s share with 57% of the total loan, which is estimated at around 273.740 billion naira only”.
He was also concerned that “South-South accessed 17% or about N81.940 billion only, Federal Capital Territory (FCT) and North-Central accessed 11% or N53.020 billion only, the South East, at a measly 9%, or about 43 naira. 380 billion only, the North West which accessed 5% at only N24.100 billion, while the North East only accessed 1%, the lesser share of the total loan at around N4.820 billion
According to him, the DBN exists to alleviate the financing constraints faced by Micro, Small and Medium Enterprises and MSMEs in Nigeria by providing financing, partial credit guarantees and technical assistance to eligible financial intermediaries in a compliant market and fully financially viable.
He however noted that the lack of knowledge of the existence of the loan or even the DBN, the religious belief that prevents Muslims from taking loans at interest and the lack of business formalization as most loans require the having a registered company, a corporate bank account and a good business plan hampered uneven disbursement.