Banks go after Nigerian ship owners to recover non-performing loans

By Foster Obi

Peeved by the recalcitrant nature of some Nigerian ship owners that sourced loans from various banks but refused to service the loans, there are indications that the banks may have employed every available means to recover the loans. Recent reports put the value of the indebtedness at about N5billion.

Investigations by SHIPS & PORTS DAILY showed that the banks have resorted to seizing their property, intercepting the ships that they used the loan to buy and grounding them and even collaborating with non-affected banks to freeze any account linked to them.

It was also gathered that the affected banks employed the services of private loan default collectors and gave them a mandate to track the defaulters’ taking cover even beyond the shores of this country

This situation has put the ship owners in dire straits as no bank will be willing to do business with them any longer as they had seemingly reneged on the loan agreement.

Also the Cabotage Vehicle Finance Fund (CVFF) which was created by the government to serve as a buffer for them has remained a source of controversy and near total mirage.

Effort by SHIPS & PORTS DAILY to get information from some of the banks on how much may have been recovered by them from the ship owners was not successful as Nasir Rahmon, Akin Olaniyon and Rasheed Bolarinwa, spokespersons of United Bank for Africa (UBA), Zenith Bank and Skye Bank respectively, were unwilling to discuss the matter. They refused to pick their calls and did not reply to text messages.

Inside sources however said that the banks have made appreciable progress by tracking some of the loan defaulters with some of them making commitments while pleading for time. He noted that some property have been seized and put up for sale adding that a few of the defaulters in some cases have gone underground.

Checks by SHIPS & PORTS DAILY reveal that the reason why the ship owners are unable to service their loans includes lack of jobs since foreign shipping firms in connivance with some Nigerians have cornered most of the jobs they are supposed to do.

It was also discovered that a lot has to do with their lack of clear business plan and incompetence. No ship owner was willing to comment on this issue as at press time.

Isaac Jolapomo, who is a Shipowner and a former president of the Nigerian Indigenous Shipowners Association (NISA), said recently in an interview that the debt profile of ship finance loans in banks kept rising in spite of the strict appraisal processes and due diligence adopted by financial institutions in ensuring that only experienced shipping professionals access the funds.

Jolapamo attributed the situation to the lack of jobs for indigenous Shipowners, and added that it was not necessarily from the management of the funds.

“The bad debt in Nigerian banks today of ship purchases is conservatively, between three and five billion.

“Having owned and managed ships in the past three decades and half, I can conveniently say that ship ownership and management in Nigeria is not a profitable venture because of so many factors…we have put the horse before the cart.

“Go and check from NPA how much import they had last year, not one ton of that import came with a Nigerian vessel.

“Ask NNPC how much crude they exported last year, not one litre of that crude… Go to Central Bank and ask them how much they paid for freight in the last five years… If those things happen, then are we on the right path, he asked.

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