Massive Debts, Insufficient Capital, Cripples Kogi Savings and Loans Ltd Again

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By Otori Ozigi, Lokoja.

*Kogites Urges Yahaya Bello to Offer Lifeline.

 

It has been finally established that a conglomerate of insufficient capital and outstanding massive debts obtained by both internal and external customers have combined to cripple the serially troubled Kogi savings and loans Ltd for the second time in her mortgage banking history.

Investigations conducted by this independent journalist spanning over several months, have revealed that the bank was being owed over 800 million naira by multiple customers who are allegedly feeling reluctant to repay their loans for reasons best known to them, even as all debt recovery efforts initiated by relevant authorities are not yielding the desire results.

According to impeccable sources close to Lugard house, the Kogi State government which is already aware of the state of affairs of the bank, is reportedly on the verge of conducting a “forensic auditing” of the moribund bank with a view to ascertaining the true picture of her debt profile and the entire balance sheet before taking a definite decision on the best way forward.

In the same vein, our authoritative sources close to one of the anti – graft agencies in Abuja that had investigated the bank in recent time, sequel to series of petitions received from multiple sources, confirmed last week that the present crisis rocking the bank have nothing to do with fraud as being rumoured, stressing that such financial crime could not be established against the management of the bank after diligent scrutiny.

It would be recalled that the bank has a long history of running into turbulent operating storms, as it had suffered bankruptcy in the past that kept her out of business between 2004 and 2007 before former Governor Alhaji Ibrahim Idris gave the bank a N270million lifeline in 2007 that resulted in a fresh commencement of business for the bank in 2008. Part of that lifeline totaling N105million was reportedly jointly sourced from the 21 local government areas in the state, who are statutory stakeholders in the bank.

As at last week, contrary to rumours making the rounds, the bank was still in full operations in all her branches located in Lokoja, Okene, Kabba, Ayingba, Ankpa and Ajaka, just as it was confirmed that it had sent some of its workers into the already saturated labour market in the state, largely due to liquidity and undercapitalization challenges.

According to our reliable sources, payment of salaries and other allowances to the remaining traumatized and demoralized staff members, have become huge challenges in view of the fact that such payments was being tied to availability of cash.

Financial experts and seasoned bankers who spoke to this journalist last week in Lokoja, were of the view that the Alhaji Yahaya Bello led administration should urgently take steps to inject what they called “substantial amount of money” to recapitalize the bank in line with CBN extant guidelines that pegged such recapitalization cap at N2.5billion before the operating license of the troubled bank is revoked by the apex bank in keeping with best business practices.

When contacted last week, the Managing Director/Chief Executive Officer of the bank, Alhaji Abdulazeez Otohinoyi Suberu declined comment on the issue, stating that the situation of the bank had already been brought to the attention of the present government which he said was still studying the situation before they can come up with an action plan on the bank.

Meanwhile, a cross section of Kogites who spoke to this journalist on this issue were of the view that the state government should quickly initiate moves to save the bank before it goes down in view of its economic benefits to the good people of the state.

They are of the view that since Kogi state as a whole have not benefited from National Housing Fund (NHF), compared to other states, it has become imperative to resuscitate the bank so that it can continue to exist as a financial vehicle for the realization of the growing housing problems of Kogites.


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