Thirty six co-operative groups in Funtua and Bakori Local Government areas of Katsina State have been dragged before a Funtua Shari’ah Court over alleged failure to settle a N106 million loan.
The Small and Medium Scale Entrepreneurs (SME’s) loan was issued out to the cooperatives a year ago.
The benefitiaries were mainly of traders, political party and religious groups from each political ward in the local government, selected based on guidelines rolled out by the Katsina State Government.
The money was disbursed through FTL Microfinance Bank Funtua.
The bank, through its representative, Sabi’u Nuhu, told the court that the beneficiaries had defaulted in payment in spite of a two months moriorium and series of meetings and correspondences.
Nuhu said the three persons summoned from each of the 36 cooperatives had served as guarantors for the groups.
He said that only one cooperative group remitted N400, 000 out of the money.
The complainant added that the six months period for repayment had lapsed and another six months had also gone by eithout any effort by the 36 groups to pay back.
Some of the defendants, Albashir Sa’idu, Jamilu Surajo, Awwal Dahiru and Suleiman Ibrahim told the court that they were facing difficulties in recovering the loan, as most of the beneficiaries had assumed that it was free.
They agreed that each of the beneficiaries had signed payment agreement and information on loan payment modalities.
The defendants pleaded with the court to adjourn the case, to enable them contact all the beneficiaries.
The Judge, Sagir Sa’idu-Liman, ordered the defendants to write undertakings to remit to the bank the various amounts they collected on behalf of their groups.
Sa’idu-Liman adjourned the case to April 10, for continuation of hearing.
The money was part of the N2 billion Central Bank of Nigeria SMEs development fund obtained by the Katsina state government.
About 500,000 people belonging to various co-operative groups benefited from the loan which was disbursed in February 2016, with the government shouldering the nine percent interest.