NIRSAL Microfinance Bank begins COVID-19 loan recovery, shocks beneficiaries with huge deductions

Many Nigerians who received loans from the Central Bank of Nigeria (CBN) to cope with the economic impact of the Coronavirus pandemic have been shocked by the deductions of large sums of money from their bank accounts without prior notice.

The loans were disbursed by the commercial banks in 2021 to households and Micro, Small and Medium Enterprises (MSMEs) affected by the COVID-19 crisis.

The fund was managed by the NIRSAL Microfinance Bank, which received thousands of applications and charged a five per cent interest rate with a grace period that ended on February 28, 2021.

According to the CBN guidelines, the beneficiaries of the fund were supposed to be households with verifiable evidence of livelihood adversely impacted by COVID-19; existing enterprises with verifiable evidence of business activities adversely affected by the pandemic; and enterprises with bankable plans.

However, some beneficiaries claimed that they did not apply for the loans but received them as grants from friends who had their Bank Verification Numbers (BVNs).

A customer, who identified herself as Aunty Yinka, said that a commercial bank deducted N750,000 from the accounts of her and her son, even though she only received N200,000 as a COVID-19 grant.

She said that she was confused and angry by the bank’s action, which left her ‘financially insolvent’. She said that she had contacted the people who gave her the BVN to find out if they used her account to receive money.

Another beneficiary, Mr Success, said that his account was debited by N305,754, despite receiving only N473,500 as a COVID-19 grant. He said that he never applied for a loan and that the grant was not supposed to be repaid.

He said that the deduction was labelled as GSI recovery, referring to the Global Standing Instruction, a policy that allows banks to recover loans from customers’ accounts in any bank.

The spokesperson for NIRSAL, Halimat Lawal, could not be reached for comment, but a director confirmed that the bank had started recovering its loans.

He stated that the disbursement was a loan and not a grant, as widely reported. He said that the beneficiaries agreed to the terms and conditions of the loan, which were stated electronically.

A check on the bank’s website showed that it expects to recover N2.1bn from 3,523 MSMEs and N14.3bn from 31,462 households in its non-interest-bearing deposit package. It also expects to recover N112.5bn from 114,476 MSMEs and N261.4bn from 643,486 households in its targeted credit facility package.

However, some beneficiaries admitted to receiving the loans without the proper documentation and were charged at least 25 per cent of the capital before disbursement with the promise that the loan was not to be repaid.

According to a beneficiary, Onuche Isaiah, he was made to pay N250,000 and N150,000 to two ‘supposed agents of NIRSAL.’

“A friend contacted me to send my bank account number, Bank Verification Number and date of birth for a COVID-19 loan. I was told that my loan amount was worth N1m but if I consented to paying them (the agents) N250,000, they would disburse the money. While I agreed to that, another person contacted me to pay an additional N150,000,” he said.

Onuche stated that he received the sum of N700,000 as a loan after paying the agreed amount to the agents.

He lamented that he had been left to refund the loan while the agents went free.

“After asking me to pay about N400,000 before the loan was disbursed, I have been asked to pay the entire money I received. Already, over N350,000 have been debited from my account and I am still looking for money to pay up the rest. The charges are just too much for me,” he said.

Another beneficiary who preferred to be called Adama said he was aware that the application process for the loan was online “but in this country, you must know somebody to benefit from some of these government incentives.”

Adama, who did not disclose how much he received, added that he submitted his account details to an agent who agreed to help him with the process of the loan disbursement for a fee.

“I was asked to provide my bank details which I did but was asked to pay some amount of money to ‘the agents’ to get the money.

“I have visited the NIRSAL Microfinance Bank to properly document myself since the government called for the repayment,” he added.

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