The Central Bank of Nigeria (CBN) has proposed setting up a mediation panel to handle loan-related disputes, with the aim of reducing dependence on courts in secured lending cases.
The proposal was detailed in a circular signed by P. I. Oluikpe, Acting Director of the Development Finance Advisory Department, which invited stakeholders to review draft guidelines for establishing a Mediation and Dispute Resolution Panel under the Secured Transactions in Movable Assets framework.
According to the apex bank, the panel would have initial authority to hear and resolve disputes arising from the implementation of the Act before such matters proceed to court.
The CBN said the initiative is intended to strengthen the financial system by offering a specialised, faster, and more cost-effective platform for resolving disputes related to loans backed by movable assets.
It added that the framework is rooted in the Secured Transactions in Movable Assets Act, which recognises mediation as the first step in resolving conflicts between lenders and borrowers.
The bank explained that the guidelines are designed to create a clear, structured, and efficient process that promotes transparency, fairness, and confidence in asset-backed lending.
Under the proposal, the panel will use alternative dispute resolution methods and is expected to conclude cases within 90 days of the first hearing. Parties involved must agree to the panel’s authority and show they have attempted informal resolution, such as negotiation, before bringing a case forward.
The panel will comprise professionals from law, banking, finance, and dispute resolution, each with at least 10 years of experience. The CBN plans to appoint 30 members, with cases handled by smaller panels of three on a rotational basis.
Its decisions will be binding and enforceable in court as consent judgments, although appeals may be allowed on limited legal grounds within specified timelines.
The framework also stresses confidentiality, ensuring that all proceedings and shared information remain protected. Funding will come from CBN support, administrative fees, and other contributions, while stakeholders have been asked to submit feedback before the October 9, 2026 deadline.
This move follows recent CBN measures aimed at strengthening credit discipline, including restrictions on banking services for borrowers with non-performing loans, as part of broader efforts to enhance financial system stability.
