Asha Microfinance Bank ‘provides employee loans’ to settle customer debts

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Debo Orekoya (pseudonym), an employee of Asha Microfinance Bank, has accused the management of the Bangladeshi financial institution of mistreating its employees.

Orekoya told the IFJ that the unfair treatment Asha MFB is subjecting its workers to is far worse than the losses they are forced to pay if debtors default.

“Whenever customers default by not repaying their loans, the bank’s management gives loans to us, the employees, to enable us to pay what those customers owe,” Orekoya said.

“Asa Bank closes its books in December each year. Thus, the debts that you have accumulated during the year thanks to the loans granted to customers are calculated and then you are asked to pay them. It is their only option to recover these funds.

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“What happens is that they calculate all the amounts owed by the customers assigned to an employee, then divide it by 12. This means that the loan will be deducted from the employee’s salary for the following year.

“It sometimes amounts to millions of naira, and it does not prevent the company from adding new debts to you if you still have defaulting customers.

Orekoya also added that in some cases, and despite repayment of loans, employees are wrongly accused of embezzlement and fired.

“However, we are unable to recover most of our loans because the company’s loan protection is very poor,” he said. “Even after the layoff, some former employees continue to pay debts as loans run into the millions.”

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He said employees in this category are obligated to repay these loans with interest.

“We are required to pay these loans with seven percent interest. Initially, it was 14%. It was then reduced,” he said.

“But look at this: when staff are forced to pay cash and debts with their salaries, why aren’t they embezzling funds? Why don’t they steal money? How do you expect them to survive? The conditions are frustrating.

He said employee well-being is one of management’s lowest priorities.

“I once picked up a woman who ran away with the loan I gave her for two years. She was supposed to pay back N15,000 but didn’t. I was forced to take her away in my office. She had been no more than two hours when her family brought the police and accused me of kidnapping her,” he said.

“I was arrested and spent the night in jail. Asha Bank officials did not come to secure my release until around 3:00 p.m. the following day.

Orekoya told FIJ that mistreatment by bank management thrives because some senior indigenous officials also contribute to policies.

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“Most of the Nigerians working in the head office who should be protecting others are the ones helping him. Moreover, whenever a CBN official came to inspect, the management would bribe that person with money and gifts that would distract the official from the records archive. Acts of corruption have eaten away deeply; they didn’t start today,” he said.

In a previous FIJ report, the microfinance bank is accused of mistreating its employees, particularly in terms of credit recovery.

FIJ contacted Asha Microfinance Bank via the email address available on its official website, but no response had been received at press time.

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