The Bank of Agriculture (BOA) on Thursday said it has commenced legal action against bad debtors in efforts to recover N60 billion debt, adding that it is on the trail of those that intentionally diverted loans to other uses.
The Managing Director of BOA, Malam Kabir Adamu, disclosed this in Abuja in an interview with the News Agency of Nigeria (NAN).
“BOA has collaborated with EFCC and other relevant security agencies to fish out where those funds have been diverted to, and the effort has been yielding results as debtors are now seeking loan restructure and extension of the tenure of the facility,’’ he said.
He stated that the bank had also appointed loan recovery agents nationwide, which include professional recovery agents and competent lawyers, who are keeping tabs on the beneficiaries so as to ensure prompt loan repayment.
Adamu said that in view of the expected roles of BOA in the country’s efforts to achieve food security, emphasis must be placed on due diligence and loan recovery.
He explained that the debt was not exclusively BOA debt, stating that it also comprised other debts incurred during the era of Peoples Bank that was transferred to BOA, which complicated issues facing the bank.
BOA, which was created in 2000 to collaborate with farmers, acquired the assets of the National Agriculture and Cooperative Bank, the People’s Bank and the Family Economic Advancement Project. Before the acquisition, all the three entities were micro financing institutions.
Adamu said the prosecution of debtors had commenced, adding that the bank had cases before some appellate courts.
“We are doing this to let the farmers know that the money must be paid back because the loan is a revolving fund and this is the only way to remain in business.
“Time has come to change the bad precedents and the misconception of seeing loan as national cake, even some of the beneficiaries of the just-disbursed CBN Anchor Borrowers Programme (ABP) loans are defaulting,’’ he said.
Adamu commended the Federal Government for its efforts to diversify the nation’s economy with a special focus on agriculture, through which the CBN facilitated N250 billion intervention fund under ABP for BOA to disburse to beneficiaries.
He revealed that over N100 billion was disbursed to farmers in 2017, while in 2018, more than N60 billion was disbursed.
Adamu said that the bank had been persuading the farmers to repay their loans, adding that it had been sensitising the farmers on the need to ensure the sustainability of the programme via prompt loan repayment.
He said BOA had restructured and strengthened its risk management group while training the officers in better lending procedures.
He also disclosed that the bank has also started monitoring the activities of beneficiary farmers, from land clearing to crop growing, harvesting and loan repayment.