Business

Ever Wonder Why You Failed Getting a Loan from CBN?

...The Apex Bank Denies Credit to Businesses Harming Environment

Getting a loan from CBN, the Central Bank of Nigeria, your eligibility status must show that you qualify and meet up with all the basic requirements to guarantee you access to the money.

First, to be considered eligible, the loan seeker needs to have a bank account, be mentally fit, must be of the legal age grade, be credible, have a good credit facility/rating, meet the Know Your Customer, KYC Requirements and last but not least, you should be able to repay.

But it will surprise you that even after meeting these mentioned demands, you may not be granted the credit solicited.

Why You Failed Getting a Loan from CBN?

Getting A Loan
Governor of CBN, Godwin Emefiele

Just recently, the central bank governor, Godwin Emefiele, declared that henceforth, the bank would cease lending funds to businesses (whether owned by an individual or managed under a corporation) that cause harm to the environment due to the nature of their operation.

The pronouncement was made during the commemoration of World Environment Day on Thursday in Abuja. He clearly stated that the banking industry has spelt out its intention to encourage greener and environment-friendly Nigeria.

His Words, ”In the banking industry, we have made sure that lending practices must take into cognisance, our environment to be sure that sustainable banking principles are taken into account when lending money to borrowers.”

The apex bank intends to ensure Nigeria joins the rest of the world to observe a collective attempt to preserve and protect nature from external and internal harm.

The bank has already set in motion plans to work with some international financial institutions and critical development finance organisations to discourage loaning funds to companies that deliberately or involuntarily indulge in activities ruining the environment.

Businesses Harming Environment

Getting A Loan

It was made clear that it is not in the bank’s intention to deny hardworking Nigerians the money needed for their business, but high time for people to start thinking of jobs that support tree planting and regulate deforestation on a larger scale.

The kind of businesses causing damages to the environment includes companies that deal in the oil and gas sector, the mining sector which main focus is excavation, and also the construction companies cannot be left out of the few list of names mentioned on this piece.

Bank executives were advised to scrutinise clients, conduct background checks and probe borrowers’ purpose of ascertaining their genuine reasons. The only time money will be given out to customers is if they meet the bank’s environmental requirements and conditions.

Although this doesn’t cut out the possibility of having a compromise on the part of the bank where certain conditions could be pardoned or relaxed, depending on the level of impact the company’s setup would have on the surroundings.

Expatiating this point, Emefiele said, ”you want to borrow money from them, they will tell you that as long as they find anything that pollutes the environment, that does not make the environment clean and green, they will not condone that credit activity.”

The instruction to deny defaulters funds cuts across every bank in Nigeria, as bankers have been urged to see themselves as members of the global community made up of environmentalists striving to maintain a greener world.

As the saying goes, charity begins at home. The CBN governor, after his message on world environment day, decided to lead by example. Emefiele led a banking executive team, deputy governors of the bank to plant trees on the premises.

Another idea behind the instruction by the apex bank to plant trees is to encourage springing businesses to follow the same steps. Initiatives are to be centred on productivity that promotes a safer environment and contributes immensely to fighting global warming.

So, suppose you’ve ever wondered why you were denied a loan even after completing all the bank’s requirements. In that case, the simple reason that your establishment poses a danger to the surroundings may just be the answer.

Henceforth, start creating environmentally safe jobs.

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