The Federal Ministry of Finance and the Bank of Industry (BoI), have signed a memorandum of understanding (MoU) to recover an outstanding N17.5 billion loan being owed by customers of the Nigeria Economic Reconstruction Fund (NERFUND).
At the MoU signing ceremony in the Ministry of Finance was represented by its Permanent Secretary, Dr. Mahmoud Isa-Dutse while the BoI Managing Director, Mr. Olukayode Pitan stood in for his bank.
Pitan, who spoke shortly after the signing, said the bank would adopt all legal means available to recover the bad loans for the government.
“Part of what we signed today is that BoI will continue to manage NERFUND. That means that those who are owing NERFUND and also outstanding facilities that have put NERFUND into trouble, BoI will recover and make sure those loans are collected.
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“This is to let people know, especially those owing NERFUND to begin to come to the Bank of Industry for repayment. People took the money and refused to pay back, some had good reason but many did not.
“The money to be recovered now is about N17.5bn and we will use all available means open to us legally to recover the money,” he said.
Pitan deplored the failure of people who borrowed money from government agencies to repay, adding that such practice was denying others who needed funds for their business the opportunity to raise the needed financing.
He said, “For us from Bank of Industry, we have to learn from NERFUND what not to do so that we do not also end up like NERFUND.
“The idea many Nigerians have is that when you have a government institution like NERFUND, BoI, Nigeria Export-Import Bank, Bank of Agriculture that is giving out loans, they think that it’s a part of their national cake that is not meant to be repaid.
“It’s when those who have taken that money repay that the banks can be in business and lend to more Nigerians.
“It’s even sad when you know that most of these loans were given at interest rates that are below market rate. So when government has gone out of its way to allocate money to ministries and agencies to help Nigerians and they are not been paid back, you are not doing government any favour.”
In his run remarks Dutse commended the bank for the intervention in NERFUND.
He said: “We ve signed an agreement to formalise a relationship that will build between the Federal Ministry of Finance and the Bank of Industry and the National Economic Reconstruction Fund.
“We had problems earlier on with NERFUND, serious industrial crisis between the staff and the management and we decided at some point to bring in the management team from the Bank of Industry to take over the management.
“So far they ve done an excellent job and we also want the Bank of Industry to render some services to NERFUND.”