The Central Bank of Nigeria (CBN) is introducing a new approach to resolving loan disputes. It has proposed that creditors and borrowers must first go through a mediation panel before taking their cases to court.
This initiative stems from a circular issued by the CBN on Tuesday, inviting stakeholders to review and comment on draft guidelines for the Mediation Panel and Dispute Resolution Panel. The panel operates under the Secured Transactions in Movable Assets framework.
The circular, signed by P. I. Oluikpe, Acting Director of the Development Finance Advisory Department, outlines a shift from litigation-heavy processes to alternative dispute resolution methods.
Key Details of the Draft Guidelines
The proposed Mediation Panel and Dispute Resolution Panel will serve as the primary platform for resolving disputes between creditors and borrowers in secured lending transactions.
According to the draft guidelines:
- The panel will have exclusive jurisdiction to handle disputes related to the Secured Transactions in Movable Assets Act, 2017.
- It will interpret laws, rules, and regulations tied to movable asset-backed lending, including the UNCITRAL Model Law.
- All parties involved in disputes must consent to the panel’s authority.
The framework is based on the Secured Transactions in Movable Assets Act, 2017, which already recognizes the panel as the first point of recourse for dispute resolution. The CBN is now formalizing this provision by detailing procedures, roles, and enforcement mechanisms.
Structured Process and Binding Decisions
The guidelines introduce a streamlined dispute resolution process:
- The panel must deliver decisions within 90 days of the first hearing.
- Awards issued by the panel will be legally binding and enforceable in court as consent judgments.
- Parties must comply with decisions within 30 days, or the awards may be registered at the Federal High Court for enforcement.
The framework also allows for interim and partial awards before final decisions. Settlements reached by the parties can be adopted as final awards by the panel.
Appeals are limited to points of law or mixed law and fact and must first go through a High Court review before reaching the Court of Appeal.
Goals of the Framework
The CBN aims to boost confidence in movable asset-backed lending by providing a specialized, cost-effective dispute resolution platform. This is expected to improve credit access and streamline issues related to the creation, perfection, and enforcement of security interests.
Eligibility for disputes includes:
- A valid security agreement.
- A mediation clause recognizing the panel.
- Proof of security interest registration with the National Collateral Registry.
Parties must also show evidence of good faith efforts to resolve disputes before approaching the Mediation Panel, emphasizing non-adversarial solutions.
Stakeholder Input and Recent Developments
Stakeholders have until October 9, 2026, to submit comments on the draft guidelines as part of the CBN’s inclusive policymaking process.
This proposal comes shortly after the CBN directed banks to restrict access to certain services for borrowers with non-performing loans. In a letter dated March 12, 2026, signed by Olubukola Akinwunmi, Director of Banking Supervision, the CBN stated that borrowers with non-performing loans recorded in the Credit Risk Management System (CRMS) or private credit bureaus would no longer qualify for additional credit facilities.
