AKWA SAVINGS & LOANS DELINQUENT DEBTORS: AN EXAMPLE OF ECONOMIC CRIME

BYJoe Iniodu

Last week, many were jolted when they read the names of about fifty six (56) delinquent debtors that have through their actions brought the only financial institution owned by the Akwa Ibom State Government and primarily established to cater more for the needs and goals of the ordinary people in the State to its knees. The bank which has been on life support for the past 5 years appears verging towards final asphyxiation, compelling the last ditch action by the management of the bank which was the publication of names of its recalcitrant debtors last week.

Akwa Savings and Loans Limited which was licensed to carry out mortgage banking business and wholly owned by Akwa Ibom State Government was to set the stage to ease the acquisition of homes by its customers largely Akwa Ibom Civil Servants and other members of the public. It was also to provide financial services to small and medium scale enterprises. But that vision is in retreat with the surfeit of non-performing loans that the bank is mired in with apparently no bail-out to enable it reposition for the critical social and economic activities of assisting Akwa Ibom people acquire homes as well as provide fillip for small and medium scale business to have a leapfrog.

The description of the debtors as delinquent suffices for their licentiousness and insensitive action. The dictionary meaning of delinquent refers to a young person tending to commit crime, particularly minor crime. In the financial field, the usage is a bit more profound and connotative. Debts become delinquent when a borrower neglects to honour a previously agreed agreement to a lender. Of course, delinquent debts can lead to law suits and scandal, especially where the personalities involved are of high caliber and social networth who are expected to be role models and honourable men.

Unfortunately, Nigerians have for sometime been buffeted with poor role models and presumed honourable men who have no honour. One trait that has added self to the combo of Nigeria’s growing vices at the elite bracket is insensitivity. Insensitivity is the lack of concern for others’ feelings. Put differently, it is the lack of sympathy for other people’s feelings or interest.

It is insensitivity that would make a man of means approach a plebian’s bank like Akwa Savings and Loans Limited and obtain a facility in the excess of N100 million (One Million Naira) and use his enormous political weight to protect himself and circumvent repayment at the detriment of poor depositors most of them in rural communities struggling to eke out just basic living. But someone who is well in every ramification would willfully deprive these poor folks of their hard earned savings and use same to further feather his overly festooned nest. No act of insensitivity can be worst than this hideous deed which inflicts graver poverty on the masses of the people that the man of means should naturally set aside a fraction of his huge earnings to alleviate their poverty.

The fate of Akwa Savings and Loans Limited depicts our collective insensitivity and the deliberate neglect of the ordinary people by the elites. In the published debt profile which is in the excess of one billion Naira with the least of individual debt standing at almost N4 million (Four Million Naira) and the highest at about N152 million (One Hundred and Fifty Two Million Naira), the debtors as identified on the list are people who have the capacity to effect repayment without breaking sweat. None of the sums whether from bottom up or up bottom is paltry. None is also the kind of amount that an ordinary folk can walk in, process with requisite collateral and collect with ease.

Besides, there are known parameters for customers to meet before qualifying for loans. Did these people meet these conditions? If they did, did they provide the necessary collaterals that were in due equivalence with the loans they sought and received? Were the loans properly secured in terms of the collateral?

Akwa Savings and Loans Limited began to show signs of insolvency in 2014 and became actually insolvent from that same year. What modus operandi did the bank adopt in terms of recovery drive? What level of success or otherwise did that yield? What were the clauses in the loan agreements? How have they explored the extant channels in the clauses to aid the recovery exercise? It is not enough to publish names of delinquent debtors, the bank must explore ways of dealing with the matter including arrest, prosecution and forfeiture of assets.

The debtors seem to be having an easy ride especially in view of the unfortunate but recurring mindset that seems to assert that since the bank belongs to government, what they owe forms part of their share of the national cake. But there are extant laws to deal with such financial errancy. Whether viewed as economic or financial crime, the scope and scale of the act pigeonhole it as a crime against the State, not individual or body. Financial or economic crime involves the illegal or unlawful conversion of ownership of property to one’s personal use or benefit. And because the act jeopardizes the collective interest of many depositors whom the State has a constitutional duty to protect, the offence must therefore be viewed as a crime against the State.

Some studies in their classifications have put delinquent debt alongside crimes like tax evasion, cyber crimes, selling of controlled substances and abuse of economic aids. They describe all of them as economic crimes. When General Muhammadu Buhari took over the reins of government in 1983, through a military coup, the most recurring language was economic crime. From hoarding of items, to possession or trafficking of currency, not to talk of drug trafficking; all were construed as economic crimes and stiff penalties ranging from long imprisonment to firing squad were prescribed to curb the trend.

Much as one subscribes wholly to the rule of law and views government’s mode of operation at that time to be repugnant to good conscience and against every grundnorm of civilized values, the extant laws in our statute books which were created to deal with matters as that of delinquent debts of Akwa Savings and Loans Limited should be dusted up and enforced to restore sanity in financial dealings in the State and indeed, the country.

But even with all these, without government, strong intervention, Akwa Savings and Loans Limited is at the risk of going under. It would be about the third time that a financial institution that the State Government has interest would buckle under the weight of aberrant debts. Mercantile Bank which was jointly owned by Cross River and Akwa Ibom States went under owing to mounting debts. Cooperative Development Bank which was solely owned by Akwa Ibom State noticed early signs of insolvency traceable to likely the same reasons and put itself up for acquisition. It was acquired and the State’s interest was subsumed, relegated and eventually diminished.

Akwa Savings and Loans Limited has some peculiarities associated with its origin, existence and current state. The bank had its focus on mortgage. But it was to also provide financial services to civil servants as well as small and medium scale enterprises. To allow the bank to become history is to jettison the core values that were considered at its establishment. Since these core values still form our core needs, government should intervene to meet these goals. As it is often said, the first law of government is the interest/welfare of the people.

When the Obama administration came into being in the United States of America, the economy of that country was going through a difficult period. Companies were shutting down; General Motors, Ford etc. There were not government businesses but their closures were likely to have a cataclysmic effect on the American economy by ballooning the unemployment market, especially that of those who had one thing or the other to do with the companies. Obama intervened with a bail-out and restored the companies and restored American jobs.

Governor Udom Emmanuel has the phenomenal record of being a banking whiz kid. This vaunted feat would pale into embarrassing eclipse if the only State owned bank under his watch is allowed to die. As a genius in this sector, he should not only provide the bail-out to save the jobs of Akwa Ibom sons and daughters, he should also provide expertise to the management of the bank to enable the outfit relaunch and reposition for the challenges of modern banking. Also, government must not allow its name to be dragged into this messy deal, especially by politicians who think that with their contacts, all things are possible including the roguish behaviour that has given rise to this delinquent debt. Government must divorce itself from any tact support to any debtor complicit in the aberrant act and that way absolve itself of any complicity. Akwa Savings and Loans Limited must understand the implication of publishing any name in error as such could tint the credibility of its claim and lead to litigation. They must ensure that the debtors are real debtors and not names merely dragged in to achieve a long list.

Joe Iniodu is a Public Affairs Analyst