Debtors whose names were published by banks as delinquent debtors still have a window of opportunity to clear their names by clearing their indebtedness with the banks, the apex bank, has said.
The Director, Corporate Communications of the Central Bank of Nigeria (CBN), Ibrahim Muazu, told The Nation that the current exercise is “ an effort to get them (debtors) pay back what they owe,” so that the banks could recover facilities granted them.
He described the exercise simply as a recovery drive, saying it is not a measure to remove the listed debtors from the banking system.
He said ordinarily, the banks “would have blacklisted the debtors if they so desired, but that the essence of publishing the list of debtors is to shame these delinquent debtors into paying up.” According to him, “the idea is not to blacklist them from paying but to shame them into paying.”
Muazu however, said the Credit Bureau would have seen these delinquent debtors adding that this might affect the debtors’ ability to access credit facilities in the future. He noted that those whose names were published “were given three months to make good on paying back what they owed,” but refused to take advantage of the window.
In the past, members of the Federation of Construction Industry (FOCI) had expressed serious concern over the threat by the CBN to publish names of chronic debtors to banks in the country.
Its President, Mr. Solomon Ogunbusola, during a press conference had expressed displeasure over the CBN’s threat. He said the inability of his members to pay back bank loans was due to governments’ indebtedness to them.
Ogunbusola had lamented that his members had spent the loans they obtained from banks on projects such as roads and building construction in the hope that governments would pay them as at when due, lamneting that governments had failed to pay up.
Members of FOCI are made up of big construction companies, including Julius Berger Plc, C&C Construction, Costain West Africa, Hitech, Brunelli Construction, Jagal Nigeria, G. Cappa Plc, PW Nigeria Limited, Dantata and Sawoe and RCC, among others.
According to Ogunbusola, the Federal Ministry of Works alone presently owes its members over N500 billion, while one of the firms is being owed N70 billion by the Federal Government.
He urged the CBN to equally publish names of government ministries, departments and agencies indebted to FOCI members if it must implement the threat.
He said: “We are indebted to banks and CBN is threatening our members, saying that it will publish their names as chronic debtors. How can you explain it that someone borrowed money from the bank for two to three years and government refuses to pay for the contract done with the money? What will CBN do to government that refuses to pay the contractor?”
The names of such governments must be published too.”
The FOCI boss raised the alarm that construction companies in Nigeria are currently working below 30 per cent capacity, as many contractors were handicapped due to lack of payment for jobs already executed.
As expected, shareholders are on the side of the CBN and the banks to publish the names of bad debtors. Alhaji Gbadebo Olatokunbo urged the CBN and the banks to go ahead and publish the list of names of bad debtors and their companies. According to him, “the last time, those big wigs said they will go to court for CBN to have published their names because they don’t have business with it. All they eventually did was to negotiate with the banks and began gradual repayment to AMCON.”
The National Chairman, Progressive Shareholders Association of Nigeria (PSAN), Mr. Boniface Okezie had earlier argued that Non Performing Loans (NPL) in Nigerian banks have adverse effects on Shareholders and urged the CBN to go the extra mile in publishing the names of the loan defaulters .
Okezie noted that shareholders always suffer and bear the brunt of the chronic debtors in the banking industry because it affects their returns on investment. According to him, “if the names of the chronic debtors are published today heaven will not fall because they are the people wrecking havoc on banks. The fact is that names should be made known so that they could run to pay. They shouldn’t stop them from doing business with those banks.”
However, a senior banker said that publishing the names of bad debtors would definitely have adverse effect on most banks because “the names, when eventually published, would definitely include big names in the country who may likely withdraw their saving with the banks which might not be too good for banking industry.”
In the list published on Monday by some banks, contained the names of some politically exposed individuals and retired senior military personnel thus corroborating the fears of the banker that some of these individuals with strong “connections” might want to take their pound of flesh from the banks that published their names.
