Senate summons 7 MDAs over N500bn loan disbursement by DBN

Senate has begun investigation over alleged uneven disbursement of half a trillion loans to the Micro, Small and Medium Enterprises scheme, MSMEs in the six geo-political regions by the Development Bank of Nigeria, DBN.

Specifically, the adhoc committee set up by the upper legislative chamber, has summoned seven ministries, departments and agencies, MDAs for interface over the alleged lopsided disbursement.

The affected MDAs are the Ministry of Finance, Budget and National Planning; Ministry of Trade and Investment; Central Bank of Nigeria, CBN; Development Bank of Nigeria, DBN; Small and Medium Enterprises Development Agency, SMEDAN; Bank of Industry, BoI and the Bank of Agriculture, BoA.

The Senate had constituted an adhoc committee, following a November 16 resolution at the plenary on a motion titled: “Uneven Disbursement of half a trillion naira loan to six geo-political regions by the DBN.”

The mandate of the committee, chaired by Senator Sani Musa (APC Niger East) was to carry out a holistic investigation on disbursement of the loan by DBN since inception of the bank.

Speaking at the maiden meeting of the committee on Tuesday, Senator Musa said the purpose of the meeting was to map out strategies and modalities that would assist the committee execute the onerous assignment.

He, however, said although the investigation seems very daunting, with patriotism, cooperation and commitment, the committee would succeed.

Senator Musa explained that the establishment of DBN was to drive the effectiveness of MSMEs and the environment they operate, adding that its establishment was a good idea by the federal government and its development partners.

The chairman added that the key objective of the DBN was to tackle constraints faced by MSMES through provision of finance and partial credit guarantees to eligible financial intermediaries on a market conforming financial sustainable basis.

He, however, said that there are worries on the disbursement methodology employed by the bank and lack of awareness of its operation, saying that not every MSMEs in the regions , especially in the north knows about the bank.

According to him, the committee will effectively and thoroughly investigate activities and operations of the DBN to ascertain if it conformed to its establishment act, followed due diligence in execution of its mandate.

Senator Musa said the committee was not out to witch hunt any one, but would evaluate the criteria that qualifies MSMEs to access the loan and at what interest rate.

He said the committee would also review the total amount disbursed to beneficiary MSMEs from inception to date and total recovery if any.

The chairman also said the committee would examine the source of funding of DBN including contributions from development partners.

Presenting the motion on November 16, Senator Ali Ndume (APC Borno South), said the investigation was part of what was happening in the financial sector that government deliberately created to address poverty.

According to him, what happened in DBN was unfortunate, saying that his submissions on the motion on uneven distribution of the MSMEs loan was not an allegation but a fact that has not been disputed by DBN.

Senator Ndume said the committee was not out to witch hunt any one, but to find a solution and help DBN to achieve its mandate.

While urging the committee members to visit the website of DBN to study its operation since inception, he said facts indicated that there were some individuals who were interested in the loan especially in the North, but could not access the loan.