N500bn Development Fund: Senate Threatens Federal Agencies' Heads with Warrant of Arrest
DBN justifies loans disbursement
The Senate ad-hoc Committee probing the uneven disbursement of the N500 billion development fund across the six geo-political zones by the Development Bank of Nigeria (DBN) has threatened to issue a warrant of arrests on five heads of financial institutions for failing to honour its invitation.
The Committee chaired by Senator Sani Musa (APC Niger East), threatened to arrest the Managing Director of the Bank of Industry, Olukayode Pitan; the Managing Director of the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), Aliyu Abdulhamid, and the Director General of Small and Medium Enterprises Development Agency of Nigeria (SMEDAN), Olawale Fasanya.
The heads of the agencies incurred the wrath of the Committee when they did not turn up for the investigative hearing the Senate ad hoc panel.
Irked by the their absence at the session, the Chairman of the Committee, Senator Sani Musa said out of the eight relevant government agencies needed for the investigation, five were invited to appear before the committee at yesterday’s session.
The Senator said: "Out of these five, only two came while the remaining three were conspicuously absent without any letter from them explaining why.
"The assignment before this committee is a very important one, requiring cooperation and compliance from all those linked to issues at hand.
"The MD of the Development Bank of Nigeria and his counterpart from the Bank of Agriculture are here for required clarifications and explanations, making it mandatory for the MD of BOI and DG of NISRAL to appear unfailingly in subsequent sessions or risk being coerced through issuance of warrant of arrest," he said.
He added that Ministers of Finance, Zainab Ahmed; Trade and Investment, Niyi Adebayo and Humanitarian Affairs, Sadiya Umar Farouq, would appear before the committee today for required submissions on the roles they played in the alleged uneven disbursement of funds .
Meanwhile, the Development Bank of Nigeria has justified the criteria it adopted in the disbursement of loans to Small and Medium Scale Enterprises in the country from 2017 till date.
Addressing the panel, the CEO of the Nigeria Development Bank, Mr. Tony Okpanachi, said the loans beneficiaries appeared to be more in the southern part of the country because of the criteria used for the disbursement.
He said, "Our lending has criteria and they are the same with those set by the Central Bank of Nigeria," he said.
He said for a business to qualify for DBN loan, it must have less than 250 employees and must not have done a turnover of more than N1.1 billion.
"We do a risk assessment of the participating financial institutions (PFIs) before they begin to lend to businesses. We don't want to give out money and the money fritters away. So we track the end users of the loans yearly," he said.
He also said the location of the registered MSMEs in Nigeria also explained the reason for the loan's disbursement.
He said, "Where are the registered MSMEs across Nigeria? Lagos has 25 per cent, South West - 23 per cent, South South – 18 per cent, South East – 10 per cent, North Central – 10 per cent, North West – nine per cent, FCT - four per cent and North East – two per cent."
He said the bank also observed that there were issues with interestbased banking and loans in the North.
"So, we have engaged two non-interest banks in Nigeria to cater for that region," he explained.
He also said the DBN has asked participating financial institutions to build the capacity of small-scale businesses, and train them on how to structure their businesses for them to be able to access the loans.
"For DBN, it's a continuous process to get more businesses on board," he added.
The Red Chamber is currently probing the disbursement of development funds to 36 states following a motion moved by the Senator Ali Ndume (APC) Borno South.
The Chairman of the ad hoc panel, Senator Sani Musa (APC Niger East), at the inaugural sitting yesterday, said there would be a public hearing on the matter after the current investigative hearing.