Heritage Bank Storming a Politician House With Placards ? To recover loan.

MY THOUGHTS ABOUT THE HERITAGE BANK STORMING OF A POLITICIAN’S HOUSE TO RECOVER LOANS (WITH PLACARDS)

MY THOUGHTS ABOUT THE HERITAGE BANK STORMING OF A POLITICIAN’S HOUSE TO RECOVER LOANS (WITH PLACARDS)

Is it right or wrong, lawful or unlawful? Necessary or Unnecessary?

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I’m an entrepreneur and a long term one at that and so I understand the dilemma the Heritage Bank MD must have found himself

A choice between doing what is morally right and perceived proper to the world, and that of doing what it Ethically wrong, which might be seen as betraying trust

So if you’re in between and really don’t know what stand to take, let me provide some context.

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One of the reasons we started our Fintech Extramileafrica was to bridge the gaps left in banking and finance sector, which has dragged Nigerians into over 50% rate of Financial Exclusion

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While majority assume that financial inclusion is just achieved by creating branches and creating POS points, it’s far more than that

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At the Bottom of Pyramid, those market women, traders, barbers, etc are not just in need of fund transfer, NO

They need Credits and loans to facilitate trade

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Just like our Billionaires need so much Credit to create wealth and remain rich,

our over 60% Population below / around poverty level, also need other people’s money to build businesses and create wealth, finance their careers and create wealth and much more.

However, the banking sector has failed SMEs and informal sector for far too long
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Let me put this in proper contexts

As of 2020, SMEs Contribute a Staggering 50% to Nigeria’s GDP aside being responsible for most of its employment

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Guess how many SMEs we have in Nigeria?

Just guess...

It’s a staggering 41.5 million+ SMEs in Nigeria (SMEDAN Survey 2017) which as of today far exceeds the 30.1 million SMEs in the USA

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You’ll be wondering, how come the number in the USA is lesser, yet they have a far better economy

We’ll get there very soon.

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Now, Guess how many of our SMEs are able to access business Finance ?

Just guess please...

A Shameful and alarming 5% as of 2020 ( Pwc 2020)

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Yet we want “Economic Growth”

We are facing the All time high inflation and our Government is rather focused on Forex, when in actual sense, they should pay attention to Local Production, local industries, etc that will reduce importations and foreign spending which is placing weight on our currency and making it weaker by the day

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Now note, as of 2019, Nigerians have over 73.2 millions Bank Accounts which increased to 111.2 million in accounts in 2020 due to COVID-19 (According to NIBSS)

If I want to place an assumption that many individuals actually have more than 1 bank account and as of recent,

- have just around 43.5 million BVNs registered (As of September 2020, according to NIBSS)

I can safely opine that we have just around 80 million functional accounts owners

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So the big question we should ask is

- if the arm of the country that contributes 50% to the GDP, actually gets only 5% Financing

- And while I won’t have to dig deep into the Wide gap in consumer lending (or personal loans to the masses) between the Common man and the Wealthy in Nigeria

Where is the money we save in Banks, the money from some 80 million Nigerians who save and who according to Proshare still increased deposits by up to 18% accross 8 of the top banks ?

The answer to this question, while is not straightforward, is found in how banks handle funds placed in their trust by the people

I’ll take some time later on to write on “How the Banks Make Money” and “How Nigerians May Remain Poor”

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But let’s quickly take a look at one aspect of why Heritage Bank had to go to the front of the gate

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A research by Oxfam shows a near total direct relationship between political and economic status in Nigeria

Which makes the Political Class be on nearly the same wealth par with Top Business Players.

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One might agree that some of these politicians had businesses before venturing into politics, however this is not the same for many of Nigerian Political class

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For example, do a thorough search of the name of the Politician whose house was visited and you won’t find One Major Business he owns, every single story about him started from 1999 and becoming a presidential aide to the President

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Now, time will fail me to dig deep into the characteristic lifestyle of Politicians taking loans from banks

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I’ll also not be able to, in this edition state the Volume of Large Scale Businesses and their owners who are owning Banks and AMCON huge sums of Debts

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But this is the case:

That while all our MSMEs are struggling for Finance and SEC is doing all it can to ensure that Average Business owners can’t access money from the Nigerian people, in the name of protection (which though dicey, isn’t wrong provided there is fair ground in access to finance)

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The National debtors keep walking free, many actually keep owing for Tax Evation (a capitalist game) or rather “Tax Control”

While the retail savers who actually power the economy can’t access loans because some big wigs hold their money

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I love Industrialists, i know we need to build conglomerates and we will build more.

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Yet I believe all young entrepreneurs in Nigeria if they’ll be given the same chance by banks as the large industrialists, we will create more jobs, increase local production, increase exports and the economy will be better.

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WHAT ABOUT DATA PRIVACY?
Could Heritage Bank have done better?

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Maybe, Maybe not

But then, the courts are on strike (not sure of their status)

And as far as CBN is concerned, just like many other institutions in the country, one or two calls can possibly control and keep the relevant authority silent

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This might not necessarily be their only possible route, I’ll create a post later on “loan recovery routes in Nigeria”

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But, I personally think more politicians and industrialists holding banks to ransom need to be exposed, this way and other ways, just as CBN has published such names in the past

Especially, when they are not holding on to their end of the bargain or faulted on all factors that can make their NDAs hold water
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It is to be well noted that when a loan is taken, legally, the contract is only finally completed after the Loan is repaid

And each arm of the contract can use the information for any necessary steps required to get the loans recovered

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What about the CBN’s GSI Policy?

Yes, the GSI (Global Standing Instruction) Policy of the CBN enacted in 2020, allows Banks to Activate a GSI instruction to let a bank deduct their debts from another bank

But the question is:

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Will the GSI work on Nigerian Politicians ?

Should the banks crash because some individuals hold them to ransom ?

Should the poor in Nigeria, the SMEs etc remain stifled with funds?
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Finally,

Do I support this?

It’s dicey

And definitely It could be better

But In all legal ways possible, Debtors who hold on to massive savers and depositors funds, should be handled

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I rest my ?

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Olatunde Victor Adeoluwa
TECH Business School


Atolagbe Olamilekan

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