• Friday, September 29, 2023
businessday logo


Senate probes uneven disbursement of N500bn loans by DBN

Senate tasks FG on equal job opportunities for Nigerians

The Senate has set up an adhoc committee to investigate the alleged uneven disbursement of N500billion loan to the six geo-political zones by the Development Bank of Nigeria (DBN).

The upper legislative chamber, in its resolutions on a motion to that effect by Ali Ndume (APC Borno South) and co-sponsored by Ibrahim Bomai (APC Yobe South) on Wednesday, specifically urged the bank to ensure equitable disbursement of the loan to all the zones and also expand its facilities beyond the sectors already captured.

The top five sectors considered for the loan are oil and gas (42percent), manufacturing (16percent), agriculture, forestry and fishery (7.2percent), trade and commerce (6.3percent), and transportation and storage (3.5percent).

Deputy President of the Senate, Ovie Omo-Agege, who presided over the plenary, named the chairman, Senate Committee on Banks, Insurance and other financial institutions, Sani Musa as the chairman of the adhoc committee while Ibrahim Danbaba (North West); Ayo Akinyelure (South West); Mathew Urhoghide (South South); Ali Ndume (North East); Uche Ekwunife (South East) and Sadiq Umar from the North Central as members.

The Committee was given two weeks to do its findings and report back to the plenary.

Presenting the motion, Ndume had alleged that a huge disparity and uneven disbursement of the N500b loan to the six geo-political zones and states in the country in 2021 by the DBN.

Read also: Obaseki budgets N320.35bn for 2023 fiscal year

He specifically mentioned Lagos State as the major beneficiary with 47 percent of the total loan while the entire Northern region got 11 percent.

The lawmaker said: “The bank’s Annual Integrated Statutory Report 2021 obtained on 13th July, 2022, from the organisation’s website, showed that the bank was able to disburse a loan worth N483billion only out of which only 11percent went to the 19 states of Northern Nigeria while 47percent went to Lagos State alone.

“The 11% of the loan that went to the North totals about N53.130billion and that the 47percent that went to Lagos State alone totals N227.010billion only.”

Ndume expressed concern that “the loans were given to the six geo-political zones, where the data showed that the South West accessed the lion’s share with 57percent of the total loan, which is estimated to be around N273.740billion only.”

He was also worried that “the South South accessed 17percent which is roughly N81.940billion only, the Federal Capital Territory (FCT) and the North Central accessed 11percent which was N53.020billion only, South East accessed a paltry 9percent which was roughly N43.380billion only, the North West, which has 5percent accessed N24.100billion only, while the North East accessed only 1percent, the least share of the total loan at roughly N4.820billion only”

According to him, the DBN exists to alleviate financing constraints faced by the Micro, Small and Medium Scale Enterprises, MSMEs in Nigeria through providing finance, partial credit guarantees, and technical assistance to eligible financial intermediaries on a market-conforming and fully financially sustainable.

He however noted that lack of awareness of the existence of the loan or even the DBN, religious belief that precludes Muslims from taking interest loans, and lack of formalisation of business as most loans require that one has a registered company, corporate bank account and a good business plan have hampered the uneven disbursement.