In Nigeria, the Anambra State Government has initiated moves to prosecute farmers who have defaulted in the repayment of microcredit loans given to them by the government. In 2008, the Anambra State Government had given NGN 150 million (USD 1 million) worth of loans to some 2,339 farmers in the form of revolving loans. According to the Anambra State Government, a number of the farmers are refusing to repay the loans.
To finance the 2008 agricultural loans, the Anambra State Government sourced the NGN 150 million (USD 1 million) from the Nigerian Agricultural Cooperative and Rural Development Bank (NACRDB). The NACRDB is a development finance institution wholly owned by the Government of the Federal Republic of Nigeria with 60% of the share capital owned by the Federal Ministry of Finance Incorporated and 40 % owned by the Central Bank of Nigeria. To read more on Anambra as one of only 12 state governments which contributed funds to microfinance in Nigeria, please read this Microcapital article. The loans were distributed by the State Ministry of Agriculture for the purpose of increasing the state’s food and animal production.
Mr. Sam Okiwe, Permanent Secretary of the State Ministry of Agriculture of Nigeria, hinted at a press conference in March 2009 that the government would be taking more aggressive action against the defaulting farmers and said some of the farmers who benefited from the loans are deliberately refusing to pay the government back. Okiwe continues, that the farmers’ defaulting of their loans has denied others from benefiting from the program, as the government may not release further loans to farmers unless the loans given to others are recovered. There is no information available as to why the farmers refuse to pay back the loans.
Mr. Okiwe added, “[Anambra State Government] has directed the Ministry to be more aggressive in the recovery of the loans and defaulting farmers would be prosecuted. As I am talking to you, we have sent the names of the first batch of defaulting farmers to the Ministry of Justice for necessary action with regards to their prosecution.”
By: Andrea Chu
Additional Resources:
Vanguard, March 20, 2009: “Anambra to prosecute micro credit loan defaulters“
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