Senate Constitutes Panel to Review DBN’s N483bn SMEs Intervention Loans Under Buhari

Sunday Aborisade in Abuja

The Senate yesterday, set up a seven-member to review an alleged uneven disbursement of N483 billion by the Development Bank of Nigeria SMEs.

The funds were disbursed to the SMEs through the micro finance banks.

The Senate raised a seven member adhoc committee to investigate the matter and report back to the Senate in four weeks for further legislative action.

The panel would be chaired by Senator David Umahi, while senators Babangida Oseni, Ali Ndume, Sani Musa, Tokunbo Abiru, Ipalibo Banigo and Chizoba Chukwu, would serve as members.

The red chamber took the decision after an extensive debate of a motion by Senator Ali Ndume (Borno South) which was supported by 64 other senators.

The motion was titled, “The need to holistically investigate the disbursement of loans by Development Bank of Nigeria, NIRSAL and related Banks to micro, small and medium scale enterprises (MSMEs)  in Nigeria from 2015 to date.”

The motion, earlier moved by Ndume and three others was investigated by an ad hoc committee in the 9th Senate and a report was submitted by the panel headed by Senator Sani Musa (Niger East).

Deliberating on the motion at plenary yesterday, the Senate noted that  the huge disparity and un- even distribution of half a billion naira to states in the six geopolitical zones of Nigeria and the states in the country in 2021 by the Development Bank of Nigeria .

Ndume said the bank’s Annual Integrated Statutory Report 2021 obtained by him on 13th July, 2022, from the its website showed that the bank disbursed loans worth N483, 000, 000, 000 out of which only 11 per cent went to the 19 states of northern Nigeria, while 47 per cent went to Lagos State alone.

He also noted that the 11 per cent of the loan that went to the entire northern totals about N53.1bn while the 47 per cent that went to Lagos State alone totals about N227bn.

Ndume further added that the South-West accessed the lion’s share which was 57 per cent of the total loan, which was estimated to be about N274, 740, 000,000 only.

He expressed worry that the South-South Zone accessed 17 per cent, (N81, 940, 000, 000); Federal Capital Territory (FCT) and the North-Central Zone, 11per cent, ($53, 020, 000, 000) only;  the South-East Zone,  nine per cent, (N43, 380, 000, 000); the North-West  has 5 per cent, (N24, 100, 000, 000) and the North-East accessed only 1 per cent, N4, 8bn

He said the DBN existed to alleviate financing constraints being faced by Micro, Small and Medium Scale Enterprises (MSMEs) in Nigeria by providing finance, partial credit guarantees, and technical assistance to eligible financial intermediaries on a market-conforming and fully financially sustainable basis.

The Senator Ahmad Lawan-led 9th Senate set up an adhoc Committee to probe Ndume’s claims and the panel chaired by Senator Sani Musa (Niger East), investigated the development and submitted its report which was debated, passed and sent to the executive for implementation.

Former Minister of Finance, Budget and National planning, Mrs Zainab Ahmed, had urged the development bank to relax its criteria which had made it difficult for other geopolitical zones to access the loans.

He also said that the 13 per cent of the loan that went to the north totalled about Fifty Three  Billion , One Hundred and Thirty Million Naira (N53,130,000,000) while the 47 per cent that went to Lagos State alone totals Two Hundred and Twenty Seven Billion and Ten Million Naira (N227,010,000,000) only..”

According to the breakdown of the loan  presented by Ndume, “the South West got 57 percent worth N274,740,000,000; South South got 17 percent worth N81,940,000,000; North Central got 11 percent worth N53,020,000,000; South East got 9 percent worth N43,380,000,000; North West got 5 percent worth N24,100,000,000; North West and North East got just One percent worth N4,820,000,000.”

The Development Bank of Nigeria exists to alleviate financing constraints being faced by MSMEs in Nigeria through providsion of finances , partial credit guarantees and technical assistance to eligible financial intermediaries on a market – conforming and fully financially sustainable basis.

Ndume, also noted  that the top five sectors considered for the loan were oil and gas (42.0 percent), manufacturing (16.0 percent) , agriculture, forestry and fisheries (7 .2 percent), trade and commerce (6.3 percent), and transportation and storage (3.5 percent),

However, there was mild drama as senators took time to dissect the motion

Seriake Dickson (PDP Bayelsa) while suggesting an addition prayer asked that the adhoc  panel should extend its assignment by looking into all intervention loans by the Central Bank of Nigeria  including the Covid-19 palliative, the anchor borrower loans and other palliatives.

The additional prayer was dropped on the pretext that would make the assignment of the adhoc committee unending.

Senators Orji Uzir Kalu (Abia North);

Olamilekan Adeola (Ogun West); said Ndume had the notion that his North East zone was shortchanged but forgot that the development bank had laid down procedures to disburse loans.

They, however, appealed to their colleagues to allow Ndume’s motion to be given a second look to clear all doubts.

Sani Musa (Niger East) who headed the former adhoc committee in the Ninth Senate, said  there is a difference between bank loans and palliatives .

While agreeing that development institutions has criteria for granting loans, added that the institutions might not be strictly followed.

He disclosed that 65 percent of loans disbursed by DBN had been repaid.

Musa also said interest of northerners in applying for the loan may be restricted by religious belief that no interest should be paid on.loans while financial institutions take 17 per cent on loan.

Ndume said he perfectly understood the workings of development institutions and their requirements.

The Senator said he got information presented from the website of the DBN and microfinance institutions involved.