By ADEBIYI ADEDAPO, Abuja
The House of Representatives ad-hoc Committee probing the activities of government-owned Development Finance Institutions (DFIs) has bemoaned alleged diversion of multi-billion naira loans approved for private companies.
Chairman of the committee, Hon. Emeka Anohu also identified poor management and corruption as part of the challenges facing the DFIs. He however appealed to Nigerians who haven’t serviced their loans to do so in the interest of the nation.
“In the same manner, we would invite to a public hearing by way of publications in the Nigeria dailies the customers that accounted for the bad debts that have grounded the activities of the DFIs to tell Nigerians why they have refused to pay their loans,” he said.
Anohu who spoke at a press briefing yesterday explained that the ongoing investigation of activities of National Economic Reconstruction Fund (NERFUND) revealed that the agency has ceased to function due to its high non-performing loans (NPLs).
“NERFUND which was set up in 1999 by the Act of Parliament has ceased to carry out its mandate of providing funds for the MSMEs and large enterprises because of its high non-performing loans which rendered it comatose.
“The government has given an executive order for its operations to be wound down and merged with Bank of Industry. Our investigations have revealed that the agency was set up for a very laudable purpose of providing funds to MSMEs, which remains largely unachievable.
“The MSMEs still require cheap funding from the government, which can be better provided through agencies like BoI, NERFUND, BoA and the likes. The failure of NERFUND like its other counterparts was due to poor management over the years, diversion of funds to cronies, poor business models that could not support its operations and paucity of funds,” Anohu noted.