Social Media erupted in outrage on Thursday after a series of letters emerged between Guaranty Trust Bank (GT Bank) and Honourable Samaila Suleiman, a sitting member of the house of reps for his failure to repay his loan obligations.
In the first letter dated May 10, 2016, the Samaila had applied for a loan with GT Bank requesting that he needed it to repay his loan with UBA and then use the balance to address an urgent funding gap.
Another letter dated May 12th 2016 from UBA revealed that he owed a loan of about N121.5 million. The letter apparently was a formal conformation of his indebtedness with UBA which GT Bank would have needed to see to process his loan request.
It took GT Bank just 48 hours after his application to extend a loan facility of about N130 million to Hon. Samaila Suleiman at an interest rate of 19% and tenor of 32 months (Two years 8 months). The purpose of the loan was “to bridge finance gap”.
The offer letter also indicated that the repayment source for the loans was from “monthly deductions of principal and interest from the allowances from the National Assembly”.
In a follow-up to letter of rebuke and plea, the bank wrote to the Honorable Speaker Dogara complaining of the failure of the Samaila to service his loan obligations leaving a balance due of about N31.5 million. The bank accused him of diverting his allowances and not picking his calls or being available in his office. They also claimed that he occasionally replied text messages but did not clearly state how he intended to repay the loan. By diverting his allowances, the bank will not be able to recover the fund. The bank did not state if the N31.5 million was the final outstanding balance or if it was only what was due.
The tweet below appears to be the original source.
— SEGA L'éveilleur® (@segalink) December 8, 2016
This revelation elicited an apparent outrage from a lot of Nigerians on social media not just at the honourable member but to the bank as well. Here is why?
Loan Amount – A loan of N130 million given to a politician and secured only against allowances shows the depth of profligacy among political office holders. Recurrent expenditure is high as government waste billions of naira on political office holders who do not provide mutually beneficial service to the Nigerian people. For years, Nigerians have requested that government officials (particularly National Assembly) reveal their full salaries and allowances insisting that it should be cut down to save money which can be diverted to other critical areas of the economy. Just last November, the National Assembly took delivery of the first batch of 360 Peugeot cars in Abuja. The National Assembly budgeted about N3.6 billion for cars in 2016 alone.
Moral Grounds – It is also opined in some quarters that the loans may have been originally secured to enable the lawmaker defray the cost of his election to the National Assembly. Most people believe that politicians typically borrow from banks to engage in political campaign with a promise to pay back after they have won. Banks, are also favourably disposed to lend these politicians money hoping to court some favour in return. President Buhari has also mentioned in the past that he borrowed money from a commercial bank to pay for his nomination form to the APC.
Neglect of small businesses – Another reason for outrage was the apparent willingness of banks to extend loans to political office holders rather than to small businesses. The fact that this was done within 48 hours highlights the level of risk management in some commercial banks. In fact, insiders inform Nairametrics that most banks have policies that extend loans to politicians, senior public holders (such as Perm Secs, DG’s etc.) at concessionary interest rate. Some have an ‘open credit’ of as much as N200 million. Some Nigerians believe a loan to the tune of N130 million could have served the economy better had it being extended to small businesses thus spurring economic growth and creating jobs. Rather, the money was given to a politician who will likely use it to settle political god fathers or splurge on it.
Honourable Samaila Suleiman is 35 years old and a graduate of Mech Eng at the Abubakar Tafawa Balewa University Bauchi. He represents Kaduna North constituency and belong to the party of the President APC.