Nahimat Adekoga
The Senate on Tuesday declared out of a total of N16.3 trillion credit facilities issued to Nigerians and corporate entities by banks as loans within the last 10 years, N2.2 trillion have been classified as non – performing.
The N2.2 trillion non – performing loans according to it constitute 14 per cent of the N16.3 trillion credit facilities issued out to various debtors by the banks during the period under review leading to a worrying development in the country.
The position of the upper legislative chamber on the staggering non-performing loans was contained in a report presented to that effect by its Committee on Banking, Insurance and other Financial Institutions which recently led to the passage of the bill seeking for legal framework for credit bureau services in the country for third reading.
In the report presented by the Chairman of the Committee, Senator Rafiu Adebayo Ibrahim (APC Kwara South), and concurred to, by the Senate in passing the bill for third reading, the banking industry is said to be burdened by high level of non-performing loans whose beneficiaries are no longer traceable.”
A close look at the banking industry reveals a high level of Nonperforming loans within the last 10 years. For instance, as at August 2016, non-performing loans stood at N2.2trillion which is 14 per cent of the total credit of N16.3trillion credit facilities issued out by the banks.
“Some of these loans have become almost impossible to recoup because the beneficiaries cannot be traced any longer”, averred the report.
In stopping the menace, the senate in the adopted report, said legally backed vibrant frame work for credit reporting and referencing becomes very imperative and necessary in the financial sector which made it to expressly passed the bill into law for the establishment of a credit bureau which will serve as a company that collects information from various sources and provides credit information on individual consumers for a variety of uses.
