The Minister of Finance, Budget and National Planning, Hajiya Zainab Ahmed, declared Thursday that criteria currently being used for disbursement of N500billion Development Fund across the six geo – political zones will be reviewed for evenness.
She stated this when she appeared before the Senate ad-hoc committee set up to investigate the alleged uneven disbursement of the N500bn Federal Government loans already given out to Micro Small and Medium Enterprise (MSMEs).
The Senate had following a motion by Senator Ali Ndume, set up the adhoc panel chaired by Senator Sani Musa to investigate the matter.
Ndume had claimed that the South-West geopolitical zone in the country, especially Lagos State, had the largest number of the laons beneficiaries.
The chief executive officers of the affected banks like the Development Bank of Nigeria and the Bank of Industry among others had told the panel that they adhered strictly to the criteria set up by their regulators and not geopolitical considerations in given out loans which made the committee to summon the Minister of Finance.
In her submissions before the panel, the Minister pledged to meet with the development banks management and their regulators, the Central Bank of Nigeria, to carry out the review of the criteria for loans disbursement.
She however, cautioned that such review would not be too flexible to ensure the sustainability of the development banks.
“I have been given copies of reports already submitted to the committee by the development bank and promised to look into the criteria of accessing funds from the development banks with a view to making adjustments where possible,” she said.
Earlier in his remarks, Senator Sani Musa, said the Federal Government supported the development banks so that they would not be using the same considerations that commercial banks are using.
“We want to know the conditionalities that are making it very difficult for the MSMEs to access funds from the development banks, there is the need to look at it critically.
“We want to know the criteria being used by the development banks to disbusrse funds because we know that the standards were set by the Central Bank of Nigeria.
“The criteria should be such that the weak MSMEs would be able to access it.
“The Bank of Industry for instance, was set up to industrialised Nigeria. It means every part of the country must be considered,” he said.
The Nigerian economy is being run by the MSMEs because we have about 39 million of them across the country. We need to ensure their survival”, he said.
The Development Bank of Nigeria was set up to enhance the development of the MSMEs across the country but it doesn’t lend directly to the beneficiary businesses. Instead it lend to them through microfinance banks.
The MFBs also provide criteria for the lendee and do credit analysis. They send their reports to the DBN which would collate the report and approve for disbursement.
The criteria set by the DBN was reviewed by the regulator and approved by CBN.
