Bank debtors: Named? Yes. Shamed? No By Bruce Malogo

Godwin-Emefiele-3In this part, contrition is high priced. In fact, it can almost be listed among the lost arts. In Nigeria, public confession or admission of wrongdoing has become a tragic casualty of our ambiguous ethics. You may say it is one of our cultural troubles of ‘the new normal.’ And it is. Which is why we are most likely to come out of this gale of publicly naming chronic, delinquent bank debtors without achieving the ethical benefit. Of course, an inherent value in naming them is to shame them. Not that the shaming is the primary purpose. No, definitely not. But the nuanced, yet fundamental outcome of pageant of public shaming ought to strengthen our public moral tenor.

In the heat of the global financial crisis of the last decade, Washington debated why AIG executives should continue to profit from the carnage they helped caused. A Republican senator from Iowa, Charles Grassley, like many Nigerians today, was enraged by the attitude of the executives.  In fit of anger, the Congressman tended to the mob. He said he would feel a little better if the AIG’s bosses would be as shamefaced and “follow the Japanese example and come before the American people and take that deep bow and say, I’m sorry, and then either do one of two things: resign or go commit suicide.” The Congressman might not have meant the suicide aspect in its practical sense, but the message was clear: those who contributed one way or the other in bringing hardship and anguish to a people must answer severely for their acts, even in the most unorthodox, bizarre fashion. Public shaming serves the purpose. Nigeria’s deviant bank debtors, those who have held on to people’s monies and refuse to pay back, should also be treated in like manner. The trouble, however, is that somewhere in the course of our decadent excesses, we have corrupted the culture of contrition as well.

Otherwise, how could this be happening not too long after our financial institutions almost imploded that it took the then CBN governor, Mallam Sanusi Lamido Sanusi, to try to put back Humpty Dumpty. At the time, Sanusi had to save our banking sector from itself, from the ruinous hands of managers and their outside collaborators. Five banks had to be rescued. What happened to those five banks then, if truth must be told, was not an accident – it was a virtual suicide; a premeditated act in self-destruct. Everybody saw it coming. Even those with the understanding of a child knew that some of those banks were just running all over the place playing Tarzan without the streakiest of Tarzan’s invincibility. Although some people knew it was all sandcastle, Sanusi brought it down home to everyone, the naïve and all, that in spite of their (the banks) show of invincibility and a-man-for-all-seasons, those banks were what the Good Book would call “white-sepulcher.”  They were just some huge empty shells.

Remember that when Mallam Sanusi was handing down his sentence on the five banks, he was unsparing. The reason he gave for the calamitous fall was that the banks overreached their hands. He said they lent much money out; so much that worked against their wellness. Not just that. The executives, he said, were not only reckless, but they also mindlessly refused to work with the books and the rules. At the last count, they doled out a princely sum of N2.4 trillion. If only the cause of the horror stopped at that.  The man, who is now the Emir of Kano told the nation that, these banks gave out these monies “free.” Or would you want to tell me what it means for a bank to give facilities without securities? Because that is what Sanusi said they did – gave loans without securities. As my people would say, the woman you married from the dance-floor will definitely walk away from the dance-floor. The principle is simple: easy come, easy go. So, beneficiaries of the largesse went home, sat down and refused to pay – principal, interest and all. And how much of hemorrhage do you think the system could withstand? Not so much as it was subjected to. So the banks, having suffered so much blood-loss, became anaemic and they were just about slipping into coma when the Sanusi’s CBN came running with blood, oxygen-tank and all. Then new helmsmen were asked to nurse the banks to life and to good health, while those who maneuvered the institutions to such near-death, subsequently went into “certain discussions” with relevant security authorities and the judiciary. What really has come out of that? Definitively, one has been decided. Another one was recently in the news, but I can’t say now whether it has been decided definitively.

In the last two weeks or so, we are back into the same old bullring, doing the bullfight – sort of. On April 22, 2015, the CBN directed banks, discount houses and AMCON to publish list of delinquent debtors, staring from August 1. The debtors are those whose accounts have been classified as lost. They include persons, entities, directors, subsidiaries and other related parties. The apex bank had said the bad debtors would also be blacklisted and “banned from participating in the Nigerian foreign exchange market and in the Nigerian government securities market.” And so, the frustrated sector has been flooding national dailies with names of these customers with toxic relationship. Although some persons have kicked that their names appear in the infamous listing (and some have gone to court genuinely), that should be expected in a nation where people will do the wrong thing, look you straight in the eye and ask the devil to take the hind-side. We are, indeed, in a country where a man would commit the most heinous of crimes and when there is public indignation as a result, he would scream – persecution. Or, he’d tell you to go to hell, after all, he wasn’t the only one or the first person to have done whatever it is you said he did.
But the whole idea of how these loans entered one-chance remains as curious as it is annoying. And we should begin by asking these questions:

What has happened to the old tested and trusted way of carrying on the business of banking? What has happened to the positive conservatism that goes with banking? What of integrity, honesty and modesty? What, I ask, has happened to prudence? And, directly to the area of discontent: Credit and credit administration? Maybe some of us don’t understand these things or that there is something these banks and the CBN are not telling us. It’s all so confusing. How is it that banks would give loan without collateral? This is important because that is fundamental. I should think that before a customer secures bank facility, he has to have something that has been accepted as guarantee. In which case, should he defaults in paying back, the bank will have recourse to the object of guarantee. So, how can we be talking about delinquent or stubborn debtors here? Shouldn’t the backs have taken possession of the collaterals? My understanding is, if a loan is secured, what do you care about whether or not defaulting customers are willing to pay, or even capable of paying?

My neighbour, Mrs Olukoya, told me of how, some 32 years or so ago, her father lost the only house he had when a bank took it because he was unable to repay the N12,000 loan the bank gave him. Why would a banker throw up his hands and start to wail when the loan he gave is not performing? He can only do that when he operates outside of the rules. A banker becomes reckless, if not dubious, when he starts to walk outside of the lines and the rules that guide the processes and the procedure of his business – and his conduct is just as crucial. It even gets worse when you have to deal with Nigerians. This may sound callous and downright dishonouring. But the truth has to be told. I am a Nigerian and I understand my compatriots too well to know that this thing called “benefit of the doubt” is a very costly act of faith and goodwill.
No doubt, there are some of these debtors who are genuine victims of our bad economy and the notorious inconsistency of government policies. It is also true that many are what it is said they are – delinquents. As they are wont to do, it would seem that the latter set, instead of paying back the loans, deliberately sits on them. And the truth is that some of them take the loan and go on splurge. A quintessential Nigerian is not content with one or two houses – only poor, struggling men are so “cursed.” Acquiring houses round the world gives the Nigerian a lot of kick and much breath. One or two cars are not enough, just as one wife is a punishment “reserved for the poor.” Even when a man has one wife, he is keeping a string of women outside. That is how we are. We have no sense of proportion or of moderation. And the regret is that our society does not frown at these things – it rather glories in them.
It is, therefore, the reason bank officials would not be scared to dole out loans, either without security or proper risk appraisal. And it is equally for the same reason that a businessman or even some fun-seeking private individual would go to a bank, take a loan and dare the devil to ask him for repayment. Yes, the banks have been splashing newspapers with the names of these defaulters. Yes, we hear that some of these debtors have been going to negotiate with the banks. Yes, some will eventually pay back and the books will look green again and life will continue as usual. But given our notoriety for passing off our guilt, we would have missed out on one of the twin aspects of this whole campaign – the shaming aspect. There should be no question that we need shame. It has moral, redemptive power. Morality bears on the way we treat each other to maintain as much peace, fairness and social harmony as is possible. To this, guilt and shame are central.