According to the Lagos State government, the funding provided to business owners by the Lagos State Employment Trust Fund (LSETF) is still a loan that needs to be repaid within the allotted period.

The explanation was given by Mr. Akinyemi Ajigbotafe, the Commissioner for Wealth Creation and Employment, during the presentation of the Ministry’s scorecard at the Y2024 Ministerial Press Briefing, which was held in Alausa, Ikeja, to mark the start of Governor Babajide Olusola Sanwo-Olu’s second term.

According to him, the need for the explanation arose from the fact that approximately 18% of the loan recipients have not yet repaid the government, even after all efforts to locate and facilitate repayment had been made.

He said: “I want to use this medium to clarify that the financial aid given by the Lagos State Employment Trust Fund is not a grant neither is it ‘Money for the boys’ as might be misconstrued by some persons”.

He states that failure to return a loan on time or at all could result in potential beneficiaries being refused access to it. Defaulters also run the possibility of facing severe legal action from the government, as specified in the application form.

Acting Executive Secretary of LSETF, Feyisayo Alayande, discussed the agency’s procedures for enforcing repayment terms. He said that a defaulter would be blocked from future access to any loans, whether from public or private institutions.

She continued by saying that the organization also has a section devoted to informing potential applicants about the terms and conditions of the loan and emphasizing that it is neither free money nor an entitlement that won’t be tracked down.

“As I speak, we have a Fund Recovery Desk within the agency, we also work with law enforcement agencies to ensure that loans given to individuals or corporate organisations that remained recalcitrant are collected from them.

“What we also do is to track any beneficiary that tries to abscond from repaying the loan through his/her Guarantor information. The Guarantor will be held liable for the repayment or he will have to provide the whereabouts of the defaulted”, Ayandele stated.

The Acting Executive Secretary discussed the prerequisites that potential borrowers must meet in order to be eligible for an LSETF loan. These prerequisites include a government-issued ID card, a BVN, a NIN, and a LASRRA number.

Depending on the amount of the loan being asked for, she continued, the applicant may in some other circumstances be required to provide a certificate from the Corporate Affairs Commission (CAC) in addition to making a down payment of a refundable 5% equitable contribution.