By Dahiru Suleiman
The Central Bank of Nigeria (CBN) has said it would soon publish in the newspapers names of loan defaulters under its Agricultural Credit Guarantee Scheme. This is according to a document titled: “Guidelines for the Agricultural Credit Guarantee Scheme” recently released by the CBN. The CBN also warned that borrowers who divert the funds provided under the Agricultural Credit Guarantee Scheme Fund (ACGSF) might earn a five-year jail term. According to the CBN, the Fund aims to provide a guarantee in respect of loans granted by lending banks for agricultural purposes under the scheme, adding that in furtherance of the scheme, the bank will do what it must to recover loans from defaulters.
“The Fund, if considered necessary, will publish names of defaulters in the newspapers and report the same to the Credit Information Bureau of Nigeria,” the bank stated. The apex bank, however, cautioned that the agriculture loans must be used for purposes for which they were obtained, as a diversion would attract a five-year jail term. “Banks should remind prospective borrowers under the Scheme that it is an offence for which one may be imprisoned for five years, to apply the loan for purposes other than those for which they are given,” the new guidelines instructed.
The programme intends to boost the level of bank credit to the agricultural sector. Loans under the amended act include advances, overdrafts and any credit facility.
The purpose of the Fund is to provide guarantee in respect of loans granted by lending banks for agricultural purposes under the scheme with the aim of increasing the level of bank credit to the agricultural sector. “Loan under the amended act, according to the apex bank, includes advances, overdrafts and any credit facility and should be taken as such wherever it is used in these guidelines and other circulars.
In a related development, the President/Chairman of Council of the Chartered Institute of Bankers of Nigeria (CIBN), Dr. Bayo Olugbemi, has expressed dissatisfaction over the rising cases of financial crimes in the country’s banking sector, saying it is time the judiciary embraced new technologies for its prosecution.
He also decried the continued abuse of court processes by delinquent borrowers. Besides well-known strategies to frustrate debt recovery efforts by employing different tactics to delay court proceedings, he said there are new efforts to convert loans ostensibly obtained for business purposes into foreign currency and moved to other countries.
Olugbemi said this yesterday at the 21st National Seminar on Banking and Allied Matters for Judges in Abuja. The seminar was themed, ‘Strengthening the quality of Judicial Systems and Banking Operations through Innovations’.
He argued that if creditors were getting more and more innovative in their attempts to evade legitimate legal obligations, judicial officers and regulatory authorities such as the Central Bank of Nigeria (CBN) and Nigerian Deposit Insurance Company (NDIC) should be more innovative in responding to such antics.
The administrator, the National Judicial Institute, Justice Salis Abdullahi, said the theme of the seminar was tailored towards addressing pertinent issues affecting the financial services sector.
He noted: ‘’We cannot shy away from the fact that numerous challenges are facing the financial services sector, among which is the interplay between financial technology and traditional banking, the complexities of this interface and their attendant consequences, which need the attention of all stakeholders.’’
In his goodwill message, the Governor, Central Bank of Nigeria (CBN), Godwin Emefiele, said that a deeper understanding, coupled with technological innovations, would improve the justice system.