Association of Small Business owners Association of Nigeria, ASBON, President Femi Egbesola, speaks with Bukola Aroloye on the unrecovered loans and the not-so-smooth relationship between BoI and SME operators.
he House Committee on public account alleged that the BoI has some unrecovered loans of about N11billion. Could you tell us the beneficiaries of such loans and what efforts you are making at recovering them?
I think the Bank of Industry is under the CBN, and it has the way of retrieving funds. You remember, sometimes when money is in the public and CBN was getting it back, those that were with the money were published and they responded positively. Some had their loans restructured. Those that were bad, I mean totally bad, were taken over by AMCON; they were able to save the bank from collapsing. I feel that the Bank of Industry needs to go through some ways or probably follow that kind of policy or something similar. The other side to it is that in this part of the world, if you give out loan it should be monitored. Some of us keep clamouring that if a bank like the Bank of Industry, which is supposed to give us intervention fund to SMEs to involve the stakeholder like us, for example, and if you are one of the SMEs that need a loan and you are told that before you will get the loan you need a letter from an association, it means that the association is also part of the recovering team. An average Nigerian might see it as national cake and because we have not seen people in Nigeria go to jail cause of credit, we see it as nothing will happen and actually nothing is happening. Another angle to it is that our culture system is not helping. When you see people in the government stealing billions of naira, all we do at the end of the day is that ‘return the money back to government’, and nothing happen to them. It’s a very wrong way of bringing our younger generation up who will also believe that everything can come cheap without paying for it. That is not good enough.
What is the relationship between SME operators and BoI?
The understanding between them is not smooth enough. If we change the method, we will get a changed result. We have not been carried along well enough. We are in a system where people pay because they are forced to pay. It’s not supposed to be, but that’s what we have here. The reason why micro finance are surviving now is because they ask loan seekers to bring relatives and form a group among their staff. Each group will know the resident and area of business of each loanee; this makes everybody responsible for each other. By this, the money will come back.
What advice do you have for government?
My advice is that first of all they should go and get a blue print that will work for Nigeria and SME. Commercial banks are not expected to work the way BOI or any other development bank operates. And the only way they can have that is if they relate with every other stake holder. If you want to be with the market women, you have to go to the market to know the weaknesses, strengths and abilities of the market women. If you just sit in the office and your loan is out there, there will be failure on delivery. If we look for a blue print that is different from what we have now and peculiar to our environment and our culture, also have an office that will monitor by calling the clients frequently.
Can’t the BoI and development bank be merged?
If we have as many banks as we like, with whatever name, it’s better. I think in any environment that there is no competition, it will not bring out the best. Competition brings out their best; if we have competition between development banks they will buckle up. SME is too large for the Bank of Industry; we need many of these banks to boost the goals of the SMEs. If we have just one Bank of Industry there will be no progress.