TONY Elumelu’s Heirs Holdings got loans totalling N41.823 billion from the United Bank for Africa (UBA) at 15 percent interest rate, Economy Post has found.

Elumelu is both the chairman of UBA and Heirs Holdings. He is also the founder of Tony Elumelu Foundation.

Findings showed that as of December 2022, Elumelu’s Heirs Holdings owed UBA N13.442 billion. However, the firm’s debt to the bank rose to N41.823 billion by June 2023. This shows that Elumelu’s Heirs Holdings borrowed N28.381 billion from UBA between January and June 2023.

Currently, the Central Bank of Nigeria (CBN)’s monetary policy rate (MPR), which is the benchmark interest rate in the economy, is 18.75 per cent, meaning that any bank lending below that is doing so at below the cost of funds.

Interestingly, while the loans borrowed by Heirs Holdings from UBA rose by 211.137 per cent between January and June 2023, the interest rate remained the same. The bank’s half-year financial statement showed that the rate was static at 15 per cent.

As of December 2022, the CBN’s MPR was 17.5 per cent, meaning that Heirs Holdings’ loans, particularly the N28.381 billion obtained between January and June 2023, were obtained below the benchmark and market rates.

A page from UBA Interim Consolidated and Separate Financial Statements for the Period Ended 30 June 2023 listing Tony O. Elumelu as a director of Heirs Holding while noting the 15% loan rate given to the company.
The market rate of loans in Nigeria is between 20 per cent and 30 per cent, analysts said.

Heirs Holdings is an investment firm founded by Elumelu in 2010 “to drive private investment and champion entrepreneurship across Africa.”

The UBA loans to customers cost much higher than 15 per cent. The bank’s personal loan products cost 2.5 per cent interest rate monthly or 30 per cent rate annually. Its personal loan product named, Click Credit attracted 23 per cent interest rate annually before the CBN rate increases began in the middle of 2022. Continue Reading….