CBN moves to recover agricultural loans that farmers refuse to pay and threaten to deduct from bank accounts
- CBN very unhappy with farmers who received loans but failed to show willingness to repay
- The loans were provided under the Anchor Borrowers Program (ABP) as intervention strategies, introduced in 2015 to increase agricultural production
- After several failed attempts to collect payments from farmers, the CBN now plans to automatically collect the money from farmers’ bank accounts.
The Central Bank of Nigeria (CBN) has concluded direct deduction from the bank accounts of defaulting debtors under the Anchor Borrower Scheme (ABP).
Celsus Agla, Senior Director of CBN’s Development Finance Office in Port-Harcourt, made the announcement Thursday during a meeting with maize farmers and other stakeholders.
This day reports Agla said some farmers who got loans under the Anchor Borrower program ignored requests for repayment, and some described the loan as a subsidy, forgetting that their bank verification number was included when they applied.
These six Nigerian banks may suspend international Naira card transactions after First Bank
Agla noted that the CBN is considering using the Global Standing Instruction (GSI) which allows banks to take money from the accounts of defaulting debtors to settle their debt,
PAY ATTENTION: Follow us on instagram – Receive the most important news directly in your favorite application!
“The GSI is a system where if you have an account with a bank other than Unity Bank and there is money in that account; “because your BVN is attached to these loans, if the GSI is triggered, funds from these accounts can be collected to repay the loan to Unity Bank.”
Although he said GSI would be the last resort to collect overdue debt, that will begin soon, The Cable added.
“A creditor bank may use the GSI as a last resort, without recourse against the borrower, to collect the obligations due (principal and accrued interest only, excluding any criminal charges) from a defaulting borrower by direct set-off of deposits, investments held in eligible bank accounts of the borrower with participating financial institutions.”
CISLAC launches SDG 16 report at 77th UN General Assembly
you will remember that CBN earlier reacted to news that some farmers are using ABP loans to marry new wives.
Zenith and Gtbank Top List of Nigeria’s Most Valuable Banks
Meanwhile, a previous report by Legit.ng showed that Zenith Bank started 2022 as the most valuable commercial bank in Nigeria.
Guaranty Trust Bank is the second most valuable bank, followed by Stanbic IBTC Holdings to complete the top three most valuable banks.
Furthermore, the aggregate market capitalization of all the banks examined increased by 46.6 trillion naira to 3.84 trillion naira.