The Minister of Finance, Budget and National Planning, Zainab Ahmed, has said the Federal Government will review the criteria being used by development banks in the country to issue out loans to micro, small and medium enterprises (MSMEs) in the country to ensure nationwide spread.
The minister revealed this on Thursday when she was summoned before the Senate ad-hoc committee set up to investigate the alleged uneven disbursement of the N500bn Federal Government loans already given out to the MSMEs by development banks.
The Senate President, Ahmed Lawan, in line with a motion by Senator Ali Ndume, had set up to adhoc panel chaired by Senator Sani Musa to investigate the matter.
Ndume had claimed that the South-West geopolitical zone in the country, especially Lagos State, had the largest number of beneficiaries of the loan.
The panel was informed by the chief executive officers of the impacted institutions, including the Development Bank of Nigeria and the Bank of Industry, that they strictly followed the standards established by their regulators and did not base loan disbursement on geopolitics.
Members of the committee, particularly those from the north, disagreed with the CEOs’ arguments and requested that the criteria be reviewed because the development banks were created to guarantee a fair distribution of wealth throughout the nation.
They urged that the loan disbursement requirements be made easier so that MSMEs from all regions of the nation could access them.
They, therefore, decided to summon the finance minister to address their concerns.
Appearing before the panel on Thursday, the minister said, “I have been given copies of reports already submitted to the committee by the development bank. The criteria to access funds from the development banks are set by the supervising ministry. The last one was targeted at the technology sustainability plan.
Ahmed added, “If the government continues to provide intervention funds without adherence to criteria to sustain the existence of the banks, it will threaten their existence. I agree that we have to strike a balance between the survival of the banks, their profitability and the development objective of setting them up. Our ministry and the regulator, which is the CBN, will review the criteria so that we could strike a balance that would enable the banks to do more where development is much more needed.”