Over 62% default on CBN’s COVID-19 targeted credit facility — NIRSAL

A substantial number of Nigerians are struggling to meet repayment obligations for loans issued under the Central Bank of Nigeria (CBN) and NIRSAL Microfinance Bank’s targeted credit facility (TCF), a recent disclosure revealed.

Launched in April 2020 to mitigate the economic impact of the COVID-19 pandemic on households and small and medium enterprises (SMEs), the TCF has faced significant challenges, with over 62 percent of the loans remaining unpaid.

Out of the N419.42 billion disbursed as of September 30, 2024, defaults amount to N261.07 billion.

Despite principal repayments totaling approximately N41.39 billion and interest repayments standing at about N174.60 million, a substantial outstanding amount of roughly N378.03 billion remains, with N261.07 billion overdue, indicating widespread non-compliance with repayment schedules.

It was gathered that the TCF facilitated the creation of 1,585,872 direct and indirect jobs, making a notable contribution to Nigeria’s employment landscape.

Additionally, it bolstered domestic household consumption by supporting 792,936 beneficiaries nationwide, including 117,964 small businesses and 674,972 households.

Each of the top beneficiaries of the loan received N2.5 million for SME financing, but the majority have been classified as ‘non-performing,’ signalling challenges or failures in repayment.

Only one beneficiary, Centriculture Limited, has been identified as ‘performing,’ with a repayment of N1,000,000.00.

The disparity between the amounts disbursed and those repaid underscores the difficulties faced by recipients in meeting their repayment obligations, highlighting the pressing need for strategies to address loan default rates and enhance the effectiveness of financial assistance programs.