CBN Move to Recover Agricultural Loans Farmers Are Refusing to Pay, Threatens to Deduct From Bank Accounts
- CBN is highly unhappy with farmers who received loans but have not demonstrated a willingness to repay them
- The loans were given under Anchor Borrowers Programme (ABP) as intervention strategies, introduced in 2015 to increase agricultural production
- Following several failed attempts to collect payments from farmers, the CBN now plan to collect the money automatically from farmers' bank accounts
PAY ATTENTION: Click “See First” under the “Following” tab to see Legit.ng News on your Facebook News Feed!
The Central Bank of Nigeria (CBN) has concluded on directly deducting from the bank accounts of loan defaulters under the Anchor Borrower Programme (ABP).
Celsus Agla, Senior Manager of the CBN's Development Finance Office in Port-Harcourt, made the announcement on Thursday during a meeting with maize farmers and other stakeholders.
ThisDay reports Agla said some farmers who obtained loans through the Anchor Borrower Program have ignored repayment requests, and some describe the loan as a grant, forgetting that their bank verification number was included when they applied,
Source: Getty Images
Agla noted that CBN is considering using the Global Standing Instruction (GSI) which allows banks to deduct money from accounts of loan defaulters to settle their debt,
PAY ATTENTION: Subscribe to Digital Talk newsletter to receive must-know business stories and succeed BIG!
He explained:
"The GSI is a system in which if you have an account with any bank other than Unity Bank and there is money in that account; "because your BVN is attached to these loans, if the GSI is triggered, the monies in those accounts can be collected to repay the loan to Unity Bank."
Although he said GSI will be the last resort to recover the overdue debt, it will soon commence, The Cable added.
Agla added:
"A creditor bank may use the GSI as a last resort, without recourse to the borrower, to recover past due obligations (principal and accrued interest only, excluding any penal charges) from a defaulting borrower through a direct set-off from deposits, investments held in the borrower's qualifying bank accounts with participating financial institutions."
You will recall that CBN had earlier reacted to the news that some farmers are using the ABP loans to marry new wives.
Zenith, Gtbank lead list of Nigeria's most valuable banks
Meanwhile, an earlier report by Legit.ng showed Zenith Bank kicked off 2022 as Nigeria's most valuable commercial bank.
Guaranty Trust Bank is the second most valuable bank, followed by Stanbic IBTC Holdings to round out the top three most valuable banks.
In addition, the aggregate market cap of all the banks under review increased by N46.6 billion to N3.84 trillion.
Source: Legit.ng
