Daniel Adaji
The Central Bank of Nigeria has proposed the establishment of a mediation panel to serve as the first point of resolution for loan-related disputes, in a move aimed at reducing the volume of litigation arising from secured lending transactions.
The proposal was disclosed in a circular issued on Tuesday by the apex bank, inviting stakeholders to review and comment on draft guidelines for the creation of a Mediation and Dispute Resolution Panel under the Secured Transactions in Movable Assets framework.
According to the circular, which was signed by the CBN’s Acting Director of the Development Finance Advisory Department, P. I. Oluikpe, the proposed panel is designed to provide a faster and more efficient mechanism for resolving disputes between borrowers and lenders.
“The Panel shall, to the exclusion of any court of law or body in Nigeria, exercise first instant jurisdiction to hear and determine any dispute arising from the operation and application of the Act,” the bank stated.
The CBN explained that the initiative forms part of efforts to strengthen the secured lending ecosystem and improve confidence among financial institutions and borrowers by ensuring timely dispute resolution.
Under the proposed framework, disputes arising from the use of movable assets as collateral would first be referred to the panel before any recourse to the courts, a move expected to ease the burden on Nigeria’s judicial system.
The apex bank also called on stakeholders, including financial institutions, legal practitioners, and industry operators, to provide feedback on the draft guidelines, noting that their input would be critical in shaping the final structure and operations of the panel.
The Secured Transactions in Movable Assets framework, introduced to enhance access to credit, allows borrowers to use movable assets such as equipment, inventory, and receivables as collateral for loans.
Analysts say the proposed mediation panel could significantly reduce delays associated with court processes, while promoting a more business-friendly environment for credit transactions in the country.
