Protests Erupt As Banks Commence Collection Of COVID-19 Loans, Beneficiaries Demand Relief

Commercial banks have embarked on a widespread recovery effort to collect loans disbursed to Nigerians during the COVID-19 pandemic. Many beneficiaries are expressing shock as substantial amounts are deducted from their bank accounts without prior notice…..CONTINUE READING

The loans, distributed by the Central Bank of Nigeria through commercial banks in 2021, aimed to provide economic relief to households and Micro, Small, and Medium Enterprises (MSMEs) affected by the pandemic. Managed by the NIRSAL Microfinance Bank, the fund received thousands of applications with a five percent interest charge and a moratorium lasting until February 28, 2021.

According to the Central Bank guidelines, eligible beneficiaries included households with verifiable evidence of COVID-19 impact, existing enterprises adversely affected, and enterprises with bankable plans.

However, beneficiaries are now facing unexpected deductions, leading to protests. A customer reported a bank allegedly removing N750,000 from her and her son’s accounts, despite receiving only N200,000 as a COVID-19 grant. Similar grievances were voiced by others, indicating confusion and financial distress.

NIRSAL’s spokesperson was unavailable for comment, but a director confirmed the loan recovery, emphasizing that it was a loan, not a grant, as widely perceived. The bank has initiated a campaign to recover loans from defaulting customers.

A check on the bank’s website revealed plans to recover funds from various business sectors and households. Some beneficiaries, however, admitted to receiving loans without proper documentation and claimed they were charged significant amounts before disbursement, with the assurance that repayment was not required.

Irregularities in the loan distribution process have been highlighted, with beneficiaries reporting payments to agents for expedited processing. Some beneficiaries received loans without proper documentation and were charged additional fees.

As the loan recovery unfolds, beneficiaries are grappling with unexpected financial burdens, raising concerns about the transparency and fairness of the loan distribution and recovery processes.

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