ABUJA, Nigeria– The Bank of Industry (BOI) leadership was chastised by the Senate yesterday, Wednesday, for its inability to identify the whereabouts of loans disbursed to beneficiaries of government credit facilities under the Small And Medium Enterprises (SMEs) support program.
Members of the Senate Committee on Trade and Investment took turns questioning the BOI’s Managing Director, Olukayode Pitan, who claimed that the bank was unaware of the loan recipients.
The BOI’s Managing Director went before the Committee on Industry for an interactive discussion on the 2021 budget.
Pitan stated during his budget defense that the loans are secured by bank guarantees supplied by commercial institutions on behalf of the beneficiaries.
“Loans are given to commercial banks, which provide guarantees, and the money is then forwarded to the beneficiaries,” he added.
Angered by the Managing Director of BOI’s reply, the trio of Senator Adamu Bulkachuwa, Senator Christopher Ekpenyong, and Senator Danjuma La’ah stated that they were unaware of the activities of the Bank of Industry in their Senatorial District.
According to Danjuma, I have no idea what is going on with the activities of the Bank of Industry in my Senatorial district.
In response, Senator Ekpenyong stated that most of his Senatorial district members are unable to obtain loans from the Bank of Industry, adding that Union Bank and United Bank of Africa (UBA) do not provide bank guarantees to his constituents.
Furthermore, Senator Bulkachuwa stated, “The MD/CEO, you made comments while attempting to answer my questions on loan beneficiary distributions.” You stated that you were unable to determine where these loans would be directed in terms of the country’s geopolitical areas.
” Does this imply that the Bank of Industry is aware of where the loans are going and where the actual beneficiaries are located in the country? We’d like to know where those loans end up.
“You, the loan giver, should be more interested in the loan and where each kobo you give out goes, as well as which part of the country benefits.” You should be able to figure it out. You should not leave it to commercial banks to handle on their own.
“Our interest is in learning how the Bank of Industry is carrying out its responsibilities in terms of ensuring that industries are spread across the country.”
Mr. Pitan, on the other hand, stated, “The Senator misinterpreted me. BOI is aware of where our money is. We know where each kobo goes. In fact, he was responding to a question about whether we are the ones who decide who gets what.
“Commercial banks provide guarantees because they are the ones who will finalize the process.”
“They decide where the loans go, but there is no loan that leaves the Bank of Industry that we do not analyze.” The Bank of Industry is required to produce the paper every month. We know precisely where our funds are.”
The Committee, chaired by Senator Tokunbo Abiru, voiced dissatisfaction with the meager allocation in the 2021 budget to Micro, Small, and Medium Enterprises, which it claimed are the true drivers of the economy.
The Bank of Industry distributed N165 billion in the 2021 budget to large firms in the country, while Micro, Small, and Medium Enterprises received N40 billion as of September 20, 2021.
While defending the meager allocation to Micro, Small, and Medium Enterprises, the Managing Director of BOI stated that most people at that level are unwilling to repay the loan because they believe it is government money and they do not have to pay it back.
The Committee decried the fact that major firms in the country are granted massive finances while micro, small, and medium enterprises are allocated meager allocations in the 2020 budget, calling this a sad development.