Nairametics| Mr. Ibrahim Alamba, North Central Zonal Manager, told News Agency of Nigeria (NAN) in Abuja today, that the poor attitude of farmers toward loans repayment has impacted negatively on the operations of the bank.
Alamba was responding to complaints by some farmers over the delay in loan disbursement by the bank, instead, the bank was aggressively recovering loans.
Alamba said that most farmers viewed the bank loans as part of their share of the nation’s resources. He explained that “giving out funds is easy, but when it comes to loan recovery; that is when you know the true nature of most of the loan beneficiaries. The trouble with loan recovery, as experienced by the BOA, is that farmers always complain about not having enough harvest; they often complain of one failure or the other to dodge loan repayment. We have low recovery rate and it is spanning over the years.
Alamba further explained that the aggressive loan recovery policy was the bank’s effort to recoup money owed. He went on to add that, “as much as possible, we try to avoid litigation because of the Nigerian culture: if you take someone to court, you are no longer friends. We talk to them but if it doesn’t work, then we invoke the terms of agreement and the receiver manager or debt collector takes over.’’
Alamba, however, conceded that one of the major constraints of the bank was inadequate funding, saying that it was the major reason for the delay in the disbursement of funds by the bank.
Currently, the BOA loan schemes are micro-credit loans and the Small and Medium Enterprises (SMEs) loans. The interest rates on the loans are currently 12 percent for micro-credit loans, and 14 percent for SMEs loans. According to Alamba, the bank is “trying so hard to bring the interest rate to a single-digit level but has yet to achieve that because of certain factors.”
Alamba, nonetheless, expressed optimism that the on-going bank restructuring efforts by the Federal Government would boost the loan disbursement capacity of the bank, and improve agricultural production in the country.