New Telegraph

Loan Recovery: CBN debits FAAC’s allocation to indebted states

Intervention loan creditors repay N3.7 trn

The Central Bank of Nigeria (CBN) has begun recovery of credit facilities granted to state governmentS as well as other intervention loans. The apex bank said it had commenced the process of debiting as much as N150 million at source from the monthly Federation Account AllocationCommittee(FAAC) of indebtedstates whose facilities are due for repayment.

Thiswasasitaffirmedthat allinterventionsgrantedwere revolving loans, which must be paid back, reiterating they were not grant facilities. Relatedly, the bank has announced considerable scaling downoninterventionsacross its various development financing window. It, in addition, confirmed recouping N3.7 trillionout of N9.3 trillion lent out to beneficiaries of various intervention facility.

CBN Director, Development Finance department, Mr. Yusuf Yila, confirmed the bank’s decision yesterday in Abuja while addressing the media along with other colleagues of the bank. Thursday’s session with CBN Directors was meant to provide perspectives to issues that shaped Monetary Policy Committe’s (MPC) decisions on Tuesday. Besides Yusuf, other Directors in attendance included Director of Monetary Policydepartment, Dr. Hassan Mahmoud, and Haruna Mustapha, Director of Banking Supervision department.

Rising from MPC meeting on Tuesday, the CBN Governor, Mr. Godwin Emefiele, announcedtwopronged measures; hiking anchor lending rate to 15.5 per cent and jerkingupCashReservesRequirement (CRR) to 32.5 per cent. Emefiele said the decision to effect upward review on MPR and CRR was to rein in inflation now at 20.5 percent in August. Yilasaidconstitutedevaluationteammonitoring utilisation of the interventions had goneoninspectionof someof the facilities. He adjudged the intervention in commercial agriculture the best performing intervention, a sector the bank lent out about N800 billion.

He urged beneficiaries, especially under the Anchor Borrowers’ Programme, small holder farmers and Targeted Credit Facility beneficiaries to pay up the facility to enable others benefit from it. “We’vegivenoutN1trillion for ABP of which close to N400 billion has come back. In my interview earlier this year, I said every single person, who has taken facility was going to pay back. We have your BVN. We are going to activate Global Standing Instruction (GSI) policy. We will continue to pull accounts in whichever banks they have accounts. “We have started recovering loans from the state government. We have been doing a loan workout with them. If a state government has taken N1 billion and has been in a six months default, we are going to be debiting them N150 million. We have started that programme. We are working withEFCC. Thegovernor has approved collaboration with

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