Jumbo pay cut: Lawmakers having problems repaying huge bank loans

Federal lawmakers who took huge short-term loans shortly after their inauguration in May are having problems repaying the loans, THE PUNCH has learnt.

Our correspondent gathered that the banks operating within the National Assembly, which also gave out the loans, are at a loss as to how get the lawmakers to start repaying.

Investigations by our correspondent showed that many of the lawmakers, especially the first timers, collected between N200m and N250m with the hope of commencing repayment with their quarterly jumbo allocations. Most of these lawmakers, a source said, used the loans to buy houses in Abuja.


Our correspondent learnt that with the 40 per cent reduction in the jumbo pay of federal lawmakers, most lawmakers have not been repaying.

The banks, our correspondent gathered, had granted the lawmakers the loans with the expectation that repayment would not be a problem once they collected their jumbo pay.

Before the reduction, members of the House of Representatives had each collected N42m per quarter, while their counterparts in the Senate had received about N60m. But with the slash, a member of the lower house now receives about N13m per quarter as running cost.

A source who spoke to our reporter over the weekend, said officials of the banks were worried by the failure of beneficiaries of the loans to keep to their promises.

According to a member of the National Assembly, who spoke to our correspondent on the condition of anonymity, the majority of those who took the loans are from the House of Representatives.

He said, “You know when we came in newly, these banks offered loans to lawmakers, most of them from the House. Some collected N200m, others N250m.

“Now the banks are having serious problems getting their money back as scheduled because the allowances are not enough. They can’t pay and the banks are not finding it funny.

“They cannot pay, the money is too small and you know it is not possible for the banks to take everything that is paid. I must tell you, there is a serious problem.”

The 2011 Appropriation Act provides N1.5b which is made available for lawmakers in lieu of accommodation. They often collect the sum as soon as they are inaugurated. Each lawmaker got a little above N3m from the total.

But some lawmakers are said to have complained to the leadership of both Houses that the money was too small to address their accommodation challenges in Abuja, given the high cost of residential and hotel accommodation in the city.

At the inauguration of the Seventh Senate, commercial banks marketing executives within the National Assembly complex, had jostled for the attention of senators and members of the House of Representatives, wooing them with gifts and offering them loans.

However, the banks expectedly denied having problems with the lawmakers when our correspondent sought their reactions.

A branch manager of one of the banks told our correspondent that the issue of loans was a “personal matter between the banks and their clients”.

“Any of our clients that met our requirements is qualified to get a loan and there is no problem about that.”

Punch