The House of Representatives has made a powerful call to the Federal Government to cancel all unpaid COVID-19 survival loans given to vulnerable households and small businesses. Citing rising default rates due to severe economic hardship, the lawmakers argued that continued repayment is unrealistic for millions of struggling Nigerians.
The demand, moved by Hon. Musa Saidu Abdullahi, follows the revelation that as of September 2023, billion remained outstanding from the billion COVID-19 Targeted Credit Facility. This represents approximately 62% of the total loan amount given out to 792,936 beneficiaries, including 674,972 households and 117,964 small businesses. The initial program helped create or sustain about 1.58 million jobs.
Survival Support, Not Business Loan
Abdullahi emphasized that the loan’s primary purpose was survival support during the unprecedented lockdown, not normal business capital.
“The COVID-19 loan was a survival support, not a normal business loan. Many households used the money for food, rent, healthcare, and school fees during the lockdown,” the lawmaker noted.
New CBN surveys show that loan defaults are rising because of sustained high inflation, food insecurity, and reduced income. The continued practice of automatic deductions is worsening the suffering of vulnerable Nigerians, with harsh recoveries threatening to collapse small businesses and increase social instability.
Demand for Leniency and Restructuring
The House explicitly called on the Federal Government, the Central Bank of Nigeria (CBN), NIRSAL Microfinance Bank, and the Ministry of Finance to:
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Cancel the unpaid component of the loans for vulnerable households.
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Restructure the SME component of the loan.
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Immediately stop all deductions from beneficiaries’ accounts.
The motion pointed to similar leniency shown in the past, such as in the Anchor Borrowers Programme, and highlighted that other nations like the United States, Canada, Germany, South Africa, and India also waived parts of their COVID-19 relief loans, recognizing the extraordinary nature of the pandemic’s impact.
