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.”
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.
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.
Because the authority doesn't give it to those deserving of it.
They give it to people who will cut their share for them and keep the rest…
We know right¡
— Ikechukwu (@OdoThomasIkech1) October 8, 2019
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.
You just said the truth, the era of "I know you" is killing Nigerians. Legit businesses hardly get the loans, but relatives do and now they complain people are not paying back.
— Aj (@Aj_anwuli) October 8, 2019
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.
Somebody once said to me " to borrow a Nigeria money is human,but for him to pay back is divine"
I for one think as a people we have a very bad attitude to loans
— Joseph Ullah (@Ummah_Joseph) October 8, 2019
This is a huge blindspot to off grid electricity systems too. BoI have been huge in driving pilot projects. Challenges are that these projects might never reach anticipated scales based on these 'national cake' perception by the users.
— Hafiz Bello (@FizoFizoFizo) October 8, 2019
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…”
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.
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.
This was disclosed in a press statement by NUPENG on Friday, August 7, 2020.
NUPENG LEADERSHIP DIRECTS WITHDRAWAL OF SERVICES BY PETROLEUM TANKER DRIVERS IN LAGOS STATE WITH EFFECT FROM MONDAY, AUGUST 10, 2020
Read more:https://t.co/TV5sFoBOcO@followlasg#Lagos pic.twitter.com/tAuOpsMc3a
— NIGERIA UNION OF PETROLEUM AND NATURAL GAS WORKERS (@officialNUPENG9) August 7, 2020
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.
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.
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.
— Bashir Ahmad (@BashirAhmaad) August 7, 2020
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;
* 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.
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).
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.
Today,@NNPCgroup signed a Head of Terms (HoT)with its partners CNOOC & SAPETRO,signifying a major milestone towards the resolution of all disputes related to Oil Mining Lease (OML)130 Production Sharing Contract.OML 130 consists of producing fields such as Akpo & Egina pic.twitter.com/VnLga9qmm9
— NNPC Group (@NNPCgroup) August 6, 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.
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.”