Anchor Borrowers: CBN to deduct directly from defaulters’ accounts

The Central Bank of Nigeria (CBN) says it will deploy the Global Standing Instruction (GSI) against loan defaulters under the Anchor Borrower Programme (ABP).

The GSI is a policy that allows banks to debit the accounts of loan holders in their banks to settle defaults.

Celsus Agla, CBN senior manager, development finance office, Port-Harcourt, said this on Thursday during a strategic meeting with maize farmers and stakeholders from the south-south and south-east geo-political zone in Port-Harcourt, Rivers state.

Agla said the method of getting the loans would compel farmers who had accessed loans under the programme to invalidate their indebtedness to the bank after repeated appeals to them appeared to have fallen on deaf ears.

“The GSI shall serve as a last resort by a creditor bank, without recourse to the borrower, to recover past due obligations (principal and Accrued Interest only, excluding any penal charges) from a defaulting borrower through a direct set-off from deposits, investments held in the borrower’s qualifying bank accounts with participating financial institutions,” he said.

He said the CBN’s position came as a result of the belief of some farmers who accessed the loans under the ABP had become reluctant to repay their liabilities and even mistaken the credit facilities for grants.

Agla, however, said if the defaulters refuse or delay payment, “the GSI is a system whereby if you have an account with any bank outside say Unity Bank and there’s money in that account; because your BVN is attached to these loans if the GSI is triggered, the monies in those accounts can be collected to repay the loan to Unity Bank”.

Meanwhile, Bello Abubakar, national president, Maize Association of Nigeria (MAAN), while engaging with maize farmers and stakeholders across the country on the ABP loan recovery initiative, said a legal means will be adopted to get defaults to repay their loans.

Abubakar said despite the numerous gains recorded so far in the ABP implementation, there had been challenges particularly as some farmers across the country have misconceptions about repayment.

“We have to make sure that we have taken all the necessary actions and measures to make the farmers who took these loans pay up,” he said.

“We know there are some challenges but a loan is a loan, the loan is not a grant, a loan is not a subsidy, so, therefore, we must follow these farmers to end make sure they repay this loan and that is why we are here”

He also highlighted other challenges such as late disbursement of funds, natural disasters namely floods, droughts, COVID-19, insecurity and political factor.

Abubakar said some politicians created wrong impressions that the loan was from them and that it was free.

He said these challenges had affected the performance of the loan repayment.

The association president further assured that it would work with the apex bank and private finance initiatives to deploy all legal means possible to get defaulters to repay their loans.

“We have to make sure that we have taken all the necessary actions and measures to make the farmers who took these loans pay up,” he added.