Reps order suspension of COVID-19 loan deductions

..Call for Waivers for Vulnerable Nigerians

By Gift ChapiOdekina, Abuja

ABUJA — The House of Representatives has directed the Central Bank of Nigeria (CBN), NIRSAL Microfinance Bank, and the Federal Ministry of Finance to immediately suspend all deductions on COVID-19 intervention loans and grant total waivers for outstanding loans owed by vulnerable households and micro-businesses.

The directive followed a motion of urgent public importance sponsored by Saidu Musa Abdullahi, Deputy Chairman of the House Committee on Finance, who emphasized that current harsh economic conditions have left many Nigerians unable to repay their loans.

The House also mandated the CBN, NIRSAL, and the Small and Medium Enterprises Development Agency of Nigeria (SMEDAN) to restructure repayment terms for SMEs, including extending moratoriums, reducing interest rates, and spreading repayment over longer periods to safeguard jobs and prevent business closures.

Abdullahi highlighted that the COVID-19 Targeted Credit Facility (TCF), introduced during the pandemic, disbursed ₦419.42 billion to households and SMEs, supporting 792,936 beneficiaries nationwide—674,972 households and 117,964 small businesses—with women accounting for 45% of the total support. The program is credited with creating or sustaining 1,585,872 jobs.

He expressed concern that as of September 2023, ₦261.07 billion (62%) of the loans remained unpaid, while ₦378.03 billion was classified as outstanding, reflecting widespread repayment challenges among vulnerable groups. Recent automatic deductions have recovered part of the amounts, but substantial hardship remains.

Abdullahi stressed that the COVID-19 TCF was a survival support loan, not a conventional business facility, with funds often used for essential needs like food, healthcare, shelter, and school fees, making repayment difficult for those who have yet to recover economically.

He cited domestic and international precedents for loan leniency, noting that Nigeria’s Anchor Borrowers Programme has repeatedly offered restructuring and partial waivers despite high default rates, while countries like the United States, Canada, Germany, South Africa, and India also forgave or extended COVID-19 relief loans in recognition of the pandemic’s humanitarian impact.

“The continued automatic debits and aggressive recoveries are causing severe hardship, risking small business collapse, worsening unemployment, and heightening social instability,” Abdullahi said, urging immediate action to protect vulnerable Nigerians.

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