CBN proposes mediation panel for loan disputes

The Central Bank of Nigeria (CBN) has moved to introduce a new dispute resolution system for loan-related issues

It is proposing the creation of a mediation panel that will serve as the first channel for settling disagreements between lenders and borrowers before resorting to the courts.

This was contained in a circular where the apex bank called on stakeholders to review and provide feedback on draft guidelines for setting up what it described as a Mediation and Dispute Resolution Panel under the Secured Transactions in Movable Assets framework.

The document, signed by the Acting Director of the Development Finance Advisory Department, P. I. Oluikpe, explained that the proposed panel would take initial responsibility for handling disputes arising from lending arrangements backed by movable assets.

Under the plan, such disputes would first be handled by the panel before parties can proceed to court, marking a shift toward alternative dispute resolution in the financial sector.

The apex bank said the initiative is designed to improve efficiency in resolving conflicts tied to secured lending, especially those involving movable assets like equipment and inventory, while also reducing the burden on the judicial system.

According to the CBN, the panel is expected to provide a specialised platform that is faster and less costly than traditional court processes, while ensuring that disputes relating to the creation, registration and enforcement of collateral arrangements are handled in an organised manner.

The proposal draws its legal backing from the Secured Transactions in Movable Assets Act, 2017, which established a framework for using movable assets as collateral and also provided for a structured dispute resolution mechanism.

The bank explained that the new guidelines aim to create a clear and uniform process for resolving such disputes, with a focus on fairness, transparency and efficiency in handling cases.

As outlined in the draft, the panel will rely on mediation and other alternative dispute resolution approaches, with the goal of resolving issues quickly while preserving relationships between parties involved in lending transactions.

To ensure timely outcomes, the panel is expected to conclude cases within 90 days from the date of the first hearing.

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