Banks stop consumer loans over Covid-19
Moses Obajemu
In response to the uncertainty in the employment status of some of their customers arising from the Covid-19 pandemic, some commercial banks have begun to withdraw consumer loan offers to their customers, Business a.m. has learnt.
Checks revealed that offers affected are the pay day loan facility which banks give to salary account holders, as well as loans to SMEs.
Investigations showed that customers who are not in default of their repayment obligations are not spared as banks move to ensure the safety of their funds at this period. Some complainants revealed that their requests are not being considered several weeks after.
It was learnt that only a few categories of workers are favoured under the current system, mostly civil servants with guaranteed monthly salaries in respect of the pay day loans. This is because state governments rarely sack workers.
However, a source explained that it was a precautionary measure against losing money or disbursing funds that may not be paid back in the event that beneficiaries were sacked.
SMEs are also not spared as they have come under intense pressure to start paying back credit extended to them while new requests are not considered. The belief is that many of them may not survive the Covid-19 pandemic crisis.
The micro finance sector is also affected as some borrowers have expressed frustration over their harassment to pay back their loans.
Some of the borrowers complained that the MfBs had been mounting pressure on them to repay their loans immediately, despite the lockdown which lasted in some parts of the country for weeks.
Strategies employed by the MFBs include constant demand notices to customers, phone calls and physical visits to business premises and homes of customers.
Investigations showed that customers who are not in default of their repayment obligations are not spared as banks move to ensure the safety of their funds at this period. Some complainants revealed that their requests are not being considered several weeks after.