The House of Representatives has urged the Federal Government to cancel all outstanding COVID-19 survival loans granted to vulnerable households and small businesses. Lawmakers also recommended that the Small and Medium Enterprises (SME) component of the loan be restructured.
In a resolution, the House directed the Federal Government, the Central Bank of Nigeria (CBN), NIRSAL Microfinance Bank, and the Ministry of Finance to immediately halt all deductions from beneficiaries’ accounts.
The motion was moved on Wednesday by Hon. Musa Saidu Abdullahi of Niger State. Abdullahi noted that the Federal Government introduced the COVID-19 Targeted Credit Facility during the pandemic, disbursing N419.42 billion to support households and small businesses affected by the lockdown.
He explained that the programme reached 792,936 beneficiaries, comprising 674,972 households and 117,964 small businesses, with women representing 45 percent of recipients. According to Abdullahi, the loan scheme helped create or sustain about 1.58 million jobs during the pandemic.
However, as of September 2023, N261.07 billion—around 62 percent of the loans—remained unpaid, while a total of N378.03 billion was still outstanding, reflecting the financial challenges faced by many families and small businesses.
Abdullahi cited recent CBN surveys showing rising loan defaults due to high inflation, food insecurity, reduced incomes, and business closures. He stressed that repayment is unrealistic for many beneficiaries, emphasizing:
“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 highlighted precedents where the government offered leniency, such as restructuring or partially waiving loans under the Anchor Borrowers Programme. He also referenced international examples, noting that countries including the United States, Canada, Germany, South Africa, and India waived portions of their COVID-19 relief loans to address pandemic-related hardships.
Abdullahi warned that continued automatic deductions could exacerbate the plight of vulnerable Nigerians, potentially collapsing small businesses, increasing unemployment, and threatening social stability.
He commended the government and financial institutions for initiating the programme, noting that it provided critical support to many Nigerians during a challenging period.