The Nation Newspaper

Tag: defaulters

  • Bank loan defaulters

    N138bn loss in one year is worrisome; CBN should wake up to its responsibilities

    We loathe a situation where the issue of bank loans default gradually becomes a Frankenstein’s monster which, rather than be nipped in the bud, becomes a romanticised item by the topmost hierarchy of the banking sector. Yet, the avoidable quagmire is not beyond redemption.

    In a report based on data obtained from the 2014 annual reports of banks, it was stated that loan default by bank customers created a combined loss of N138bn amongst 13 deposit money banks (DMBs) within the 2014 financial year. The losses purportedly incurred under their respective interest expenses, were usually charged against profits made in a financial year. The breakdown of the affected five Tier-1 banks as reported include, Access Bank Plc.- N11.7billion; First Bank of Nigeria Limited-N25.9billion; Guaranty Trust Bank Plc.- N7.1billion; United Bank for Africa Plc. N6.6billion; and Zenith Bank Plc-N13.1billion. Collectively, banks in this category incurred total loan impairment charges of N64.4billion.

    On another level, eight Tier-2 category banks also affected in the report with breakdowns of the amount owed them include: Diamond Bank Plc.- N26.4billion; First City Monument Bank Limited- N10.6billion; Fidelity Bank Plc.- N4.3billion; Stanbic IBTC Bank- N3.2billion; Sterling Bank Plc.-N7.4billion; Union Bank of Nigeria Plc.-N6.6billion; Unity Bank Plc.-N15billion; and Wema Bank Plc.- N0.1billion. Collectively, they have a total of N73.6billion credit losses. Again, the provision for the losses were made from charges against the income or profit made for a given period. This is huge when the loss of N138billion is spread across the 13 banks, it gives an equivalent of a scandalous over N10billion loss per bank.

    We realise the unstable nature of the nation’s environment that negatively impacts on businesses. Here, we are talking about things such as high interest rate of sometimes 28 to 30 per cent, unsustainably high foreign exchange rate and irregular government policies, among other risk factors. Consequently, it is not impossible that several industries/companies established with large chunk of credit facility might have witnessed avoidable difficulty; but we also know that most times, the required compulsory feasibility studies were not effectively conducted by designated bank officials while the necessary collaterals and insurance guarantee, in most cases of loan default, were handled with levity. And because the bank officers involved can make impairment charges recommendation without any definite sanction by the banks on the erring officers, that bad trend has become intractable.

    While we unequivocally call on the government to endeavour to improve the business environment, it is also pertinent to admonish the Central Bank of Nigeria (CBN) for its inefficient discharge of its supervisory role over the commercial banks. Additionally, it takes the banks so long to make this avoidable trend public simply because most officials of banks saddled with the responsibility of ensuring conformity to requirements and standards in loans granted, with the exception of natural business risk factors, compromised the process, thereby making their banks vulnerable to credit losses.

    This detrimental loan default has become a recurring decimal and a scandal in an economy like ours. The retrogressive trend that is gradually becoming a vicious circle is nothing but a manifestation of the case of corruption catching up with the banks, but with greater consequences on bank customers.

    Henceforth, we demand, like we had canvassed in numerous editorials on the subject, that the name and shame policy of chronic loan defaulters should be implemented without further delay. The CBN should set up a Credit Bureau as institutional/systemic checks to vet loan applicants so as to stop the criminal incidence of loan refinancing among banks, and to enforce standards across board on loan issues.

  • EMCOAN: Content owners threaten showdown with defaulters

    EMCOAN: Content owners threaten showdown with defaulters

    It may no longer be business as usual between the Electronic Media Content Owners Association of Nigeria (EMCOAN) and media agencies, as its leadership is set for a showdown with some media agencies that seem be a pain of sorts in the heads of its members.

    To further underscore its new resolve, the leadership  of the association has directed its members to henceforth discontinue any business relationship with the erring agencies until further notice, as part of the actions being taken by  to get the affected agencies to pay up what it called the “huge debt being owed its members and to begin to project electronic media content owners as vital partners”

    In a release, the Executive Council of the association said it was time the media agencies recognised the invaluable contributions of its members to their operations.

    The President of EMCOAN, Mrs. Debbie Odutayo, said: “For some time now, the Association has complained about the manner in which media agencies treat independent producers, especially regarding payment. The affected media agencies default with reckless abandon on the agreement signed by both parties, completely oblivious of the harsh terrain, where producers go through thick and thin to produce programmes and battle TV stations to ensure transmission so that advert placements run at all costs.”

    The statement further alleged that the affected agencies had owed EMCOAN members millions of Naira for several years.

    “Apart from delayed and irregular payments, these agencies demand a ridiculous and unjustifiable 25% volume discounts, even when the contract being issued cannot be said to be in any volume.

    In some cases, some of these media agencies take more, even up to 40%, thereby stifling members to run at a huge loss,” the statement further stated.

    Consequently, the association has resolved to publish the names of the affected media agencies, if “they refuse to do due diligence within the specified time”

    The association started while some notable Nigerian producers were on a trip to Ghana in 2012, with the sole aim of bringing content owners under one umbrella, where their needs and challenges in the industry would be tabled with a view to proffering lasting solutions.

    The statement further stated that members of the association had always cried out against alleged injustice in the hands of other players like the media houses, advertising agencies, media monitors etc.

    “Television and radio stations demand pre-payment from content owners, knowing full well that the agencies who give them ads to run within their programmes never pre-pay.”

    Another challenge we face with the media houses is the non-transmission of programmes without prior information given to the content owners. This causes untold loss of revenues as the advertisements originally scheduled to run on affected editions cannot be billed to agencies or clients.

    On the other hand, agencies default on the agreed payment plans, thereby causing content owners to renege on their financial obligations to all concerned. Apart from delayed payments, the volume discounts and other extras they request content owners to oblige them are stifling. This affects profitability and the effect spirals down,” the statement said. The association further alleged that media monitoring agencies oftentimes delay reports and sometimes give error reports.

    “A lot of time is wasted on refuting their claims, at the end of which payment time is unduly prolonged or even an outright loss of revenue when stations refuse to produce off-air dub, claiming that the time interval is too long,” it stated.

  • Delta warns tax defaulters

    Delta warns tax defaulters

    The Delta State Board of Internal Revenue (DBIR) has said it would punish individuals and corporate bodies who default in their tax payment.

    The Chairman, Thomas Joel-Onowakpo,  said this after a three-day stakeholders’ meeting with staff of the board, tax professionals, companies and Internally Generated Revenue (IGR) collecting banks.

    Joel-Onowakpo said the board would soon start  publishing names of defaulting companies and banks that delay remittance of deposited taxes.

    “Now when we held meeting with our staff, the objective is to sensitise them about what we are about to do in Board of Internal Revenue.

    “You remember in 2011, we embarked on a tax professional system.

    “Their duty is to liaise with the public to make sure that every kobo that belongs to the board is returned to the government.”

  • ITF warns defaulters

    ITF warns defaulters

    The Director-General of the Industrial Training Fund (ITF) Dr Juliet Chukkas-Onaeko has warned Ministries, Departments and Agencies (MDAs) that fail to remit one per cent of their staff salaries to the Fund or face the wrath of the law.

    She said the money is to enable the agency train people in technicals to reduce unemployment.

    Dr. Chukkas-Onaeko told The Nation that the agency is soliciting for the support and cooperation of the stakeholders in ensuring that  employers register and pay their training contributions to ITF, adding that the Fund is in working with the Nigeria Employers’ Consultative Association (NECA) to achieve maximum results.

    She said the agency would advocate a strategy to resuscitate skills training.

    The short term plan, she said, involves training youths and the unemployed in occupational trades for employment and job creation, while the medium term involves revamping existing vocational and technical schools by re-equipping them to commence training immediately.

    She said: “The long term plan involves establishing new vocational and technical school training schools in all parts of the country by all tiers of government to complement existing ones and establish 32 skills training centres in various locations of the country.”

    She said these are the agency’s way of keying into the Federal Government’s Transformation Agenda, under the National Industrial Revolution Plan (NIRP).

  • FRSC to prosecute defaulters on licences, number plates

    The Federal Roads Safety Commission (FRSC) has said the Commission may have to prosecute defaulters regarding new number plates and vehicle licences to enforce compliance after the lapse of the September 30 ultimatum.

    The FRSC Zonal Commander representing Kwara, Ekiti and Kogi states, Assistant Corps Marshal, Kehinde Adeleye spoke in Efon Alaaye-Ekiti while sensitising the community on procedures and processes involved in obtaining/renewing vehicle licences and changing old number plates.

    Adeleye warned that vehicle owners should carry out renewal before September 30, noting that by October 1, full enforcement and consequent prosecution of defaulters of both new licences and number plates would be implemented.

    According to him, vehicle owners anywhere in the state should approach the commission’s office in Ado-Ekiti, capital of the state, to process and obtain the new documents.

    Adeleye said: “The Commission has nothing to gain by punishing any driver, especially commercial operators, for failing to obtain the new license and number plates. What we are here for is to explain all that is involved and for us to go and do it before the time lapses.

    “We know that for those who would play the wise game, the period between now and September is enough to effect the changes,” he said.

    Adeleye noted that the latest move was based on findings that high rate of carnage on the roads in the country was as a result of “remote factors like training and licensing of drivers and enforcement of general road traffic regulations.”

    Ekiti State Sector Commander, Mr Rindom Kumven noted that the Command was committed to ensuring that vehicle owners in Efon Alaye and its environs “do not fall victims of contravening the law as a matter of ignorance.”

    Kumven stated that the command had a duty to educate and inform the citizens beforehand about what it entailed to either obtain a new driver’s license or renew an old one and also change their vehicles’ old registration numbers.

  • Defaulters’ll be punished, says NAICOM

    The National Insurance Commission (NAICOM) would continue to expose and sanction erring operators to serve as deterrent to others, the Commissioner for Insurance Fola Daniel, has said.

    He told The Nation that the commission would never sweep cases of errant operators under the carpet or shield them from sanctions, adding that punishment meted out on such operators are to ensure safety of policy holders and shareholders.

    Daniel said NAICOM,in imposing sanctions, gives priority to the protection of the industry, adding that it would not be disturbed by the outcry of highhandedness by some operators.

    He said: “I believe the public would want NAICOM to be like the Central Bank of Nigeria (CBN) as regards sanctions. The method of Central Bank is not a cap that fits all. It is not a medication that cures all ailments. The approach of Central Bank has its own merits, which is do it publicly let Nigerians be aware of what is happening. Of cause, the Central Bank was confronted with a different scenario that needed the remedy they applied.

    “The problem of the insurance industry is not exactly the same. So, we may not be able to borrow that medication to cure a different ailment. When you have diarrhea, you have to take drastic medica-tion to stop it, because it could embarrass you. Whereas, somebody who has headache would take panadol; two of them are medications, but are intended for different purposes. And the effects look different. So, we salute the Central Bank for what they are doing, but I want to confirm to you that from time to time, we sanction insurance operators and if it is important for the public to know, we let them know.

    “Our sanctions are largely remedial. What is upper most in sanctioning a company is the protection of policy holders. If I sanction an insurance company and put it on the pages of newspaperS, without obtaining a remedy, how does that help the policy holder? But if I can effectively sanction an operator and the interest of policy holder is fully served, that means we are doing the right thing. Let the Central Bank continue to do what it is doing; we have a different problems and different approaches in resolving the problems.

    “I assure you that we are not sweeping anything under the carpet or shielding any operator. As a matter of fact, for some months, I think there have been shouts and cries from the industry about the sanctions we have given to errant operators. We are acting as it becomes expedient and appropriate; we are not going to mimic any regulator so that the public will say we are doing something that would not be necessary.”

    It would be recalled that the commission, early in the year dropped its hammer on some brokering firms that failed to comply with the industry’s rules. It urged the public not to transact businesses with them until they are let loose of its hook.

  • Oshiomhole warns tax defaulters

    Edo State Governor Adams Oshiomhole yesterday warned that tax defaulters to pay up.

    He said it is sad that while low-income earners pay their taxes, the rich do not.

    Oshiomhole spoke at the plenary session of the Christian Association of Nigeria (CAN) at the St. Matthews Anglican Cathedral in Benin, the state capital.

    He said: “We have emphasised that we must re-invent the concept of tax. Workers at the University of Benin Teaching Hospital (UBTH) are on strike over tax payment. Tax payment is a federal law; it was not made by me.

    “People who think they can evade tax because they are working in sensitive places need to rethink. If a sick person is brought to the hospital, the fact of his being sick does not preclude the person from paying for his treatment.

    “I have a couple of times paid the hospital bills of indigent patients at UBTH, who were not discharged because they had not paid for their treatment. If you can detain the poor on account of his being unable to pay his medical bills, who are you not to pay tax?

    “We sealed the Power Holding Company of Nigeria (PHCN) and the Petroleum Products Marketing Company (PPMC) for tax evasion. If motor mechanics pay and commercial motorcyclists pay tax, there is no reason a federal agency should evade tax.

    “It is very fashionable in Nigeria for people to spend N50 million on weddings, N100 million on birthdays and even much more on funerals, but such persons are often unwilling to pay five per cent tax.

    “In such a situation, it is better to send them to prison, just to remind them that the prison is not meant for only the poor. The prison is meant for those who flout the criminal law.”

    Oshiomhole said it was sad that 52 years after independence, the masses were getting poorer. He blamed it on the absence of good governance.

    The governor said: “The state must create a good environment for the people to operate. If politicians try to divert attention, the church must stand on the side of truth.

    “In Edo State, we have tried our best; first to regain the confidence that Edo is viable. We have made modest efforts to restore hope, but what we have done is nothing compared to what we need to do to get to the level that we deserve.”

    State CAN Chairman Rev. Peter Imasuen said the theme of this year’s plenary is: “Fostering Good Governance”.

    He said: “Good governance is all about accountability and transparency. Despite increasing democracy and stability in sub-Saharan Africa, corruption and conflict remain serious barriers to ending extreme poverty.”