The next time you turn to a commercial bank for a loan, you are likely to be turned down or told sorry come next time.

The challenge has come about because of delays by government and some private businesses to pay for loans taken from these banks on time.

JOY BUSINESS is learning that the debts which is now running into millions of dollars, could collapse some of these banks if care is not taken.

For some of these financial institutions, the only consolation for now is the oral assurances from government, that they will pay these debts, that is why some have not written these debts off or reported it as a loss.

Sources say some state institutions which government guaranteed for, and also some private businesses who are in the business of importing petroleum products and commodities like rice have delayed payment.

But when JOY BUSINESS contacted some of these firms, they maintained that they took these monies from banks to pre-finance government projects, therefore as long as the state fails to pay them, it might be difficult to repay these financial institutions .

For some of these banks, as long as these debts are not paid on time, it will just not be prudent to go out and grant new loans looking at the limited amount of funds available to them.

The development has forced a lot of banks to go out and carry out some raffles to bring in more funds so they can lend and make profits on them .

Sources say the situation is so bad that some of these banks are now living on commissions and interest on old loans.

Government has however given the assurance that it is working to pay these debts very soon.


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