The leadership of the Bank of Industry (BOI) was on Wednesday lambasted by the Senate following its inability to trace the whereabouts of loans disbursed to beneficiaries of government grants under the Small and Medium Enterprises (SMEs) support programme.
Members of the Senate Committee on Trade and Investment took turns to question the BOI Managing Director, Olukayode Pitan, who claimed that the bank does not know the loan beneficiaries.
Pitan had appeared before the Committee on Industry for an interactive session on the 2021 budget, NAN reports, adding that while defending the budget, Pitan said the loans are secured through bank guarantees provided by commercial banks on behalf of the beneficiaries.
“Loans are given to commercial banks that provide guarantees, which then forwarded the money to the beneficiaries,” he added.
Angered by the submission of the Managing Director of BOI, the trio of Senator Adamu Bulkachuwa, Senator Christopher Ekpenyong and Senator Danjuma La’ah said that they were in dark about the activities of the Bank of Industry in their Senatorial districts.
According to Danjuma, I don’t know what is going on with Bank of Industry activities in my Senatorial district.
Also, Senator Ekpenyong in reaction lamented that most of his Senatorial district members are unable to access loans from the Bank of Industry adding Union Bank and United Bank of Africa (UBA) do not give Bank Guarantees to his people.
In addition, Senator Bulkachuwa said, “The MD/CEO, you made comments while trying to answer my questions on the distribution’s of loan beneficiaries. You actually said that you were not in the position to know, exactly where these loans are going to, with regards to the geopolitical areas of the country.
“Does it mean that the Bank of Industry in knowing where the loans are going to and the actual beneficiaries are located in the country? We are interested in knowing where those loans go to.
“You, the giver of the loan should be more interested in the loan and where each kobo you give out is going and which part of the country is benefiting. You should be able to know. You should not leave it for the commercial banks to handle alone.
“Our interest is to know how the bank of the industry is performing its duty in terms of ensuring that industries are spread across the country.
Mr. Pitan however said, “The Senator misunderstood me. BOI knows where our money is. We know where every kobo goes to. I was actually answering a question on whether we are the one that determines the beneficiaries.
“The commercial banks are the ones that give guarantees because they are the ones that would finalise the process. They determine where the loans go but there is no loan that goes out of the Bank of Industry that we on our own, don’t analyse. It is a requirement every month for the Bank of Industry to provide the document. We know exactly where our monies are.”
The Committee Chaired by Senator Tokunbo Abiru expressed dissatisfaction at the meagre allocation to the Micro, Small and Medium Enterprises which it asserted are the real drivers of the economy in the 2021 budget.
The Bank of Industry in 2021 budget released N165 billion to large enterprises in the country while Micro, Small and Medium Enterprises benefited N40 billion as of September 2021.
Managing Director of BOI while defending the meagre allocation to Micro, Small and Medium Enterprises said most people in that level are not ready to repay the loan believing that the money is government money and they don’t have to pay it back.
The Committee bemoaned that large enterprises in the country are given humongous funds while Micro, Small and Medium Enterprises got meagre allocation in the 2020 budget, adding that the development is a sad development.