By Elijah OluSsegun
The Central Bank of Nigeria ( CBN) has released fresh directives to all financial institutions in Africa’s fourth largest economy to curb loan defaulters.
The Apex Bank in a circular said all borrowers classified as large-ticket can no longer access loans and certain services from the Nigerian banking industry without due process.
The CBN Director of Banking Supervision Olubukola Akinwunmi issued a circular to this effect March 12 in a bid to strengthen discipline in the lending system, especially as the volume of non-performing loans rises.
“Effective immediately, all financial institutions shall: Restrict further credit access: Any large-ticket obligor with a nonperforming facility recorded in the CRMS and/or any licensed private credit bureau shall not be granted additional credit facilities.
“For the purpose of this restriction, credit facilities include loans and other forms of direct credit. In addition, such obligors shall not be granted banking facilities or contingent liabilities such as bankers’ confirmations, letters of credit, performance bonds, or advance payment guarantees,” the apex bank said.
According to the circular, those affected include borrowers, individuals or corporates, whose combined exposure across banks exceeds the Single Obligor Limit. It also includes those whose financial obligations could upset a bank’s capital adequacy ratio.
In Nigeria a Single Obligor Limit is 20 percent of a bank’s shareholders’ fund for deposit money banks, and 1 percent for micro-finance banks. For insider borrowers, the limit remains 5 percent.
The CBN determined classified the borrowers using data available in the Credit Risk Management System and reports from licensed private credit bureaus.
Many of them come from industries like oil and gas, power, and aviation, according to a CBN survey.
The regulator also directed all financial institutions to obtain additional collateral from these classes of borrowers to secure their current exposures.
The NPL level has risen to 7 percent, above the 5 percent limit the regulator allows.
Seven major banks recorded a combined exposure of at N1.57 trillion as of late 2025.
Industry watchers, however, believe the recapitalization going on will help the industry build resilience despite the rising exposures.
No fewer than 20 banks have made the N200-billion mark.
