CBN Raises Alarm Over Unpaid ₦261bn COVID-19 SME Loans

The Central Bank of Nigeria (CBN) has recently raised concerns about unpaid loans under the Targeted Credit Facility (TCF) program, which was introduced to support households and micro, small, and medium enterprises (MSMEs) during the COVID-19 pandemic.

According to a recent document, the outstanding amount of unpaid loans has reached ₦261.07 billion, with only a small portion of the principal and interest repaid.

The TCF was launched with a ₦50 billion package in 2020, and it has since disbursed ₦419.42 billion to 792,936 beneficiaries across the country.

The program has contributed to Nigeria’s employment landscape, creating 1,585,872 direct and indirect jobs.

However, the issue of non-repayment by some beneficiaries is now a major concern for the CBN.

Out of the top 10 beneficiaries of the TCF, nine have been labeled as ‘non-performing’, with one company only repaying ₦8,302.35 out of the ₦2.5 million loan.

Only one company, Centriculture Limited, has been labeled as ‘performing’, with a repayment of ₦1,000,000.00.

To recover the bad loans, the FG-owned NIRSAL Microfinance Bank (NIRSAL-MFB) activated its Global Standing Instruction (GSI) last year.

This enables direct debits from the defaulting customers’ bank accounts. NIRSAL also uploaded details of all defaulting beneficiaries to the CBN’s Credit Risk Management System (CRMS) to prevent them from accessing credit anywhere in the world.

The issue of unpaid COVID-19 SME loans under the TCF program is a matter of concern for the CBN.

The bank is actively taking steps to recover the loans and prevent further non-repayment, which could have long-term implications for Nigeria’s financial system and economic recovery.