Of bad debts and banks

I keep wondering how granting of loans by Nigerian banks turn into bad debts. Several months ago, banks began publishing names of debtors who had stopped servicing their loans in the newspapers. How can loans be approved without the presentation of collateral?

If these debtors had presented their collateral, then the banks would simply have sold the properties to off-set the debts owed them.

Going through a list of bank debtors recently published in a newspaper, I noticed that the majority of individuals or company directors on the list are influential people in the society. These are the people average Nigerians see and wish they could be in their shoes, but as the Yoruba will say, Ohun to wa leyin efa, o ju eje lo. If I translate this literally, then it will be, ‘what is behind six is greater than what is behind seven. However, in simple terms, it means that we don’t know what is behind everything that we see.

I, therefore, want to say it categorically that it is the banks that have refused to ‘oil’ the wheel of progress of this country. Our banks are only concerned about granting loans to wealthy individuals and big companies, while neglecting small and medium scale businesses, when it actual fact, it is these small businesses that can boost the economy.

Many banks can’t balance their books today because they loaned several billions of dollars to companies involved in the oil business without collateral, and now with the fall in oil price, these companies are finding it difficult to service their loans, not alone paying off the actual debt.

How many jobs can these oil companies provide Nigerians, compared to the millions of jobs that will be created when a million youths are assisted financially to set up small and medium scale businesses.

If one million youths set by small scale businesses and they employ two workers each, then that means two million people have been employed. Can this happen with oil companies? So I don’t pity banks that are finding it difficult to get back the loans they granted big companies.

Today, we are hearing reports of some banks being distressed, so we need to ask their management what happened to people’s money. Nigerians have the right to know who and who the banks lent money to and can’t recover such loans. Poor customers should not be made to suffer for the greediness of these banks.

• Yemisi Soares,

Lagos.