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BoI’s MD complains that SMEs don’t repay loans, Nigerians react 

The MD of Nigeria’s BoI, Kayode Pitan, was recently quoted as saying that it is very challenging to get repayment on loans issued to SMEs.

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BoI’s MD complains that SMEs don’t repay loans, Nigerians react 

The Managing Director of Nigeria’s Bank of Industry (BoI), Kayode Pitan, was recently quoted as saying that it is very challenging to get repayment on loans issued to SMEs. According to him, some business owners in the country often behave as if loans given to them by the BoI represent their own share of the “national cake”. As such, they refuse to pay back the loans when they are supposed to.

“People have the perception that money from BoI and other DFI, are their share of the “National Cake, so they avoid repayments.”

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[READ MORE: CBN grants approval for banks to debit accounts of loan defaulters]

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It is very easy to see Pitan’s frustration. After all, the issue of loan default is a general problem bedevilling the Nigerian banking sector. The problem also explains why Non-Performing Loan has been a major problem in the country for such a long time. Interestingly, it is the same entrepreneurs who often complain about lack of access to financial facilities that are guilty of defaulting on loans. This makes it very problematic for banks to lend, no doubt.

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In the case of the Bank of Industry, however, there is another way to consider the issue of loan default. Some Nigerians who reacted to Pitan’s complaints have pointed out that one of the reasons SMEs default on BoI loans is because said loans are supposedly given to people who are underserving of them in the first place. One person even alleged that the BoI only gives loans to entrepreneurs who are willing to give kickbacks to officials of the institution.

Other people also asserted that staff at the BoI only approve loans for those they know, regardless of whether such people meet the loan requirements. In other words, due diligence is seldom followed through, allegedly. Sadly, when the loans are not paid back, BoI’s Pitan begins to complain.

Other people, however, did point out that refusal to repay loans is a bad attitude that must stop. Those of us here at Nairametrics agree to this point of view because loan defaults have disadvantages that somehow affect everyone, albeit negatively.

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[READ ALSO: Non-Performing loans hit 4-year low as Banks recover N496 billion]

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Note that the Bank of Industry is a state-owned development financial institution whose primary function is to fund the real sector of the economy by providing funding “for the establishment of large, medium and small projects as well as the expansion, diversification and modernisation of existing enterprises…”

 

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Emmanuel covers the financial services sector for Nairametrics. Do you have a scoop for him? Well then, contact him via his email- [email protected]

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Business

Just in: Fuel scarcity looms as NUPENG directs Tanker drivers to withdraw services in Lagos

This was disclosed in a press statement by NUPENG on Friday, August 7, 2020.

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The scarcity of petroleum products appears to be looming in Lagos as the leadership of Nigerian Union of Petroleum and Natural Gas Workers (NUPENG) has directed its members to withdraw its services in Lagos with effect from Monday, August 10, 2020.

This is due to the failure of government authorities to address the various issues that have been causing serious pains and harrowing experience on the petroleum tanker drivers in the state for several months now.

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This was disclosed in a press statement by NUPENG on Friday, August 7, 2020.

 

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Details shortly…

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Business

President Buhari signs amended Companies Allied Matters bill

The President’s action on the document repealed and replaced the extant Companies and Allied Matters Act, 1990.

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Budget: FG completes just 31.7% of constituency projects, Nigerians react to President Buhari's signing of Finance Bill 

President Muhammadu Buhari has assented to the Companies and Allied Matters Bill 2020, which was recently passed by the National Assembly.

This was disclosed in a statement signed by a media aide of President Buhari, Femi Adesina and shared by the Personal Assistant to the President, Bashir Ahmad, via his Twitter handle.

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According to the statement, the President’s action on the document repealed and replaced the extant Companies and Allied Matters Act, 1990, and introduced several corporate legal innovations geared toward enhancing ease of doing business in the country.

Key innovations in the new Act:

* Filing fee reductions and other reforms to make it easier and cheaper for small and medium-sized enterprises to register and reform their businesses in Nigeria;

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* Allowing corporate promoters of companies to establish private companies with a single member or shareholder, and creating limited liability partnerships and limited partnerships to give investors and business people alternative forms of carrying out their business in an efficient and flexible way;

* Innovating processes and procedures to ease the operations of companies, such as introducing Statements of Compliance; replacing “authorised share capital” with minimum share capital to reduce costs of incorporating companies; and providing for electronic filing, electronic share transfers, e-meetings as well as remote general meetings for private companies in response to the disruptions to close contact physical meetings due to the COVID-19 pandemic;

* Requiring the disclosure of persons with significant control of companies in a register of beneficial owners to enhance corporate accountability and transparency; and

* Enhancing the minority shareholder protection and engagement; introducing enhanced business rescue reforms for insolvent companies; and permitting the merger of Incorporated Trustees for associations that share similar aims and objectives.

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Energy

NNPC signs agreement with CNOOC, SAPETRO to end OML 130 disputes

The agreement is expected to help resolve disputes stemming from Oil Mining Lease (OML).

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Crude oil market remains unpredictable- NNPC Boss

The Nigerian National Petroleum Corporation (NNPC), said it has signed a Head of terms (HoT) agreement with China National Offshore Oil Corporation(CNOOC) and an indigenous oil production firm —South Atlantic Petroleum (SAPETRO).

A statement that was issued by the state-owned oil company via Twitter, yesterday, noted that this is part of the efforts that have been undertaken towards resolving all the disputes stemming from Oil Mining Lease (OML) 130 Production Sharing Contract.

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READ ALSO: NNPC spends N535.9 billion on subsidy, FAAC in Q1 2020

Nairametrics understands that the agreement, which is temporary, could also be instrumental towards resolving similar disputes between the NNPC and other oil companies. The NNPC had previously accused some of these oil firms of under-declaring crude exports for three years between 2011 and 2013.

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READ ALSO: NNPC cultivates 2,675 hectares of cassava for Ethanol production

Specifically, the NNPC alleged that the likes of Shell, Total, Chevron, and Eni under-reported crude oil exports in their oil fields to the tune of 57 million barrels. The NNPC even sought repayments valued at $12.7 billion from the oil companies, according to a suit filed before the Federal High Court in Lagos. The companies denied the accusations.

The new agreement is now expected to help resolve such disputes. Even the NNPC’s Group Managing Director, Mele Kyari. was quoted to have said the agreement is “a major milestone toward the resolution of all disputes.”

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