Empower banks to provide more loans for SMEs, ex-CIBN boss tells CBN

Okechukwu Unegbu, a former president of the Chartered Institute of Bankers of Nigeria (CIBN), has asked the Central Bank of Nigeria (CBN) to do everything in its power to eliminate the menace of illegal money lenders, better known as loan sharks.

Unegbu spoke during an interview with the News Agency of Nigeria (NAN) on Sunday.

Loan sharks offer loans at extremely high rate returns, strict terms of collection upon failure, and generally operates outside the law.

The activities of loan sharks are often not in conformity with the CBN consumer protection regulation which mandates financial institutions to ensure that debt recovery processes are transparent, courteous, and fair.

Unegbu decried the proliferation of digital lenders in the Nigerian financial system, describing them as “dangerous to the economy”.

He urged the apex bank to empower microfinance banks to be more functional in their lending role to small businesses.

“These loan sharks are dangerous to the economy, and the CBN should do everything to eliminate them,” he said.

“They give loans to people and when there is a default they call all contacts on their phone to embarrass them; it’s unethical.

“The MfBs are better positioned to offer such service, and I’ll urge the CBN to empower the MfBs to be able to carry out their mandate more effectively.”

Last year, Godwin Emefiele, the suspended CBN governor, encouraged Nigerians to shun loan sharks and seek loans from microfinance banks.

Recently, the Federal Competition and Consumer Protection Commission (FCCPC) said it would ask Google to permanently delete digital money lending apps harassing and slandering customers from its Play Store.