Loan Default by Farmers - Prevention over Prosecution
Quote from Ndubuisi Ekekwe on June 30, 2018, 4:19 PM"The Anchor Borrowers Scheme is a Central Bank of Nigeria initiative to empower farmers in cooperative societies to get loans at single-digit interest rate from the apex bank to produce, package, refine and market farm produce", notes the Guardian. After the government made loans to many farmers, some have refused to pay. Now, the Bank of Agriculture which helps in coordinating this initiative for the government wants to get the EFCC involved. Other professionals are already helping.
He said: ‘‘We have appointed recovery agents nationwide, some of them are lawyers, some are professional recovery agents and they are working day and night to engage the farmers to be able to repay. “We are doing all these as a moral suasion to ensure that farmers repay the loan...
Getting EFCC involved for a loan averaging N250,000 would not be an effective way to use EFCC staff. The key is focusing on prevention over prosecution in Nigeria. If CBN requires that all loans it makes would be tied to BVN and anyone that takes its loan and refuses to repay would be eternally banned in the financial system, default rates would drop.
We do not need EFCC to pursue N250,000 recovery. We just need to prevent someone collecting N250,000 to be a position where we need to struggle to get it back as a nation. Yes, we need to focus on processes that would make sure that no police officer would be sent to arrest farmers because of non-payment of loans. The cost-to-benefit analysis will never work out for the nation. BVN and NIMC numbers are there to ensure we can punish those that do not want the benefits they received from governments are extended to others by paying back their loans.
"The Anchor Borrowers Scheme is a Central Bank of Nigeria initiative to empower farmers in cooperative societies to get loans at single-digit interest rate from the apex bank to produce, package, refine and market farm produce", notes the Guardian. After the government made loans to many farmers, some have refused to pay. Now, the Bank of Agriculture which helps in coordinating this initiative for the government wants to get the EFCC involved. Other professionals are already helping.
He said: ‘‘We have appointed recovery agents nationwide, some of them are lawyers, some are professional recovery agents and they are working day and night to engage the farmers to be able to repay. “We are doing all these as a moral suasion to ensure that farmers repay the loan...
Getting EFCC involved for a loan averaging N250,000 would not be an effective way to use EFCC staff. The key is focusing on prevention over prosecution in Nigeria. If CBN requires that all loans it makes would be tied to BVN and anyone that takes its loan and refuses to repay would be eternally banned in the financial system, default rates would drop.
We do not need EFCC to pursue N250,000 recovery. We just need to prevent someone collecting N250,000 to be a position where we need to struggle to get it back as a nation. Yes, we need to focus on processes that would make sure that no police officer would be sent to arrest farmers because of non-payment of loans. The cost-to-benefit analysis will never work out for the nation. BVN and NIMC numbers are there to ensure we can punish those that do not want the benefits they received from governments are extended to others by paying back their loans.
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