The Ninth Senate had, in 2022, set up a similar committee to investigate the imbalance in the disbursement of the loans by the Development Bank of Nigeria (DBN) across the country’s six geopolitical zones.
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The Senate on Wednesday set up an Ad-hoc committee to probe the alleged uneven disbursement of N483 billion loan to the Medium and Small-Scale Enterprises (MSMEs) in the six geo-political zones by the Development Bank of Nigeria (DBN) in 2021.
Recall that last week, a motion on the uneven distribution of DBN’s N500 billion loan was brought to the Red chamber but was stepped down by Senate President, Godswill Akpabio following an uproar.
This committee constitution followed the adoption of a motion sponsored by Senator Mohammed Ali Ndume (APC, Borno) and 64 other senators at Wednesday’s plenary.
The motion is 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.”
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Ndume, in his lead debate, “noted that the DBN existed to alleviate financing constraints being faced by MSMEs in Nigeria through providing finance, partial credit guarantees and technical assistance to eligible financial intermediaries on a market-conforming and fully financially sustainable basis.”
He also noted “that the Bank’s Annual Integrated Statutory Report 2021 showed that it disbursed a loan worth N483 billion in 2021, and that out of the N483 billion, only 11 per cent went to the 19 northern states totaling N53 billion while Lagos alone got 47 per cent, which amounts to N227 billion.”
Ndume, who is the Chief Whip of the Senate, said a breakdown of the loan disbursement, according to the Bank’s report, showed that Southwest got a bulk share with 57 per cent of the total loan, estimated to be N274.7 billion, while the South South accessed 17 per cent (81.9 billion); North Central and FCT, 11 per cent (53 billion); South East, nine per cent (43.3 billion); North West, five per cent (24 billion) and North East, a paltry one per cent (4.8 billion).
He noted that the five sectors considered for the loan are oil and gas (42%), manufacturing (16%), agriculture, forestry and fishery (7.2%), trade and commerce (6.3%), and transportation and storage (3.5%).
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On his part, Sen. Jibrin Isa (APC, Kogi) said since the Nigerian government does not entirely own the DBN, it is unable to unilaterally review the standards, adding that, in order to safeguard their investments, the international lenders with shares in the Bank, such as the World Bank and International Monetary Fund (IMF), jointly defined the criteria.
Isah recommended that Nigerian businesses that didn’t meet the requirements for DBN loans, apply for loans from Nigerian-owned intervention banks like the Bank of Industry and the Bank of Agriculture.
Other senators who participated in the discussion unanimously agreed that the Red Chamber should re-examine the loan disbursement to eliminate imbalance and also called for the revision of the eligibility requirements to ensure equitable geographic distribution.
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Consequently, the Senate constituted an ad-hoc committee to carry out a holistic investigation into the loan disbursement and report back to plenary in four weeks.
The committee is to be chaired by Senator David Umahi (APC, Ebonyi South), while Senators Babangida Oseni; Mohammed Ali Ndume (APC, Borno South); Ipalibo Banigo (PDP, Rivers West); Sani Musa (APC, Niger East); Chizoba Chukwu (LP, Enugu East), and Abiru Adetokunbo ( APC, Lagos East) serve as members.
