The Development Finance of the Central Bank of Nigeria (CBN) has shown that N2.126 trillion loans given out in intervention programmes remain unpaid.
The funds for the loans were sourced from the Cash Reserve Ratio (CRR) of deposit money banks (DMBs).
This is from the N2.408 trillion total loan disbursed to sub-national governments and businesses across the country when the programme was initiated in 2018.
The report which details the loans to different sectors of the economy over the past years, shows that paid loans represent only 11.71 per cent or N282.04 billion of the total loans disbursed.
The Differentiated Cash Reserve Ration (DCRR) intervention was established in 2018 with the aim of increasing FX earnings, job opportunities, diversify revenue base and provide sustainable inputs for industrial sector of the economy.
The programme had around 499 beneficiaries which includes both state governments and businesses such as Bua Refinery and Petrochemical Ltd. Interest rate payment for the programme stood at N51.47 billion with N67.3 billion as amount overdue.
According to the report, the achievements of the programme include; productive use of banks’ CRR to stimulate economic development, creation of over 6million direct and indirect jobs, import substitution and increased Purchasing Managers’ Index (PMI) for manufacturing sector.
The programme had several problems mitigating against its success such as forex scarcity, commercialisation of financed infrastructural projects to guarantee payments and poor optimisation of export potentials.
However, the report recommended that the programme be continued since it offers alternative credit funding source.
It also stated that the interest rate gap should be bridged to prevent refinancing of non-performing facilities from the books of banks.
