‘How NDIC, Banks Can Fast-track Bad Loans Recovery’

Regulatory agencies in the financial services sector have been advised how best to checkmate incidences of bad loans which have become recurrent in the sector.

The advice is coming amidst Nigeria Deposit Insurance Corporation (NDIC)’s reiterations that it was working to ensure depositors of about 600 failed institutions are paid their uninsured deposits.

The advice came yesterday, at a sensitisation seminar for Debt Recovery Agents which was held in Abuja.

Speaking at the seminar, an NDIC agent Dr Abdullahi Tahir, called on banks and regulatory bodies to introduce the inclusion of BVN as a requirement for loan issuance, saying this would help the NDIC in prompt and effective loan recovery.

This he said would checkmate the practice whereby some people use companies to obtain loans and show no commitment whatsoever towards offsetting such loans.

”What these debtors usually do is to have lots of companies, and in law, a company is different from the person.

”If my company takes a loan, if they are going after that loan, they are going after my company and not me as a person.

”They now extend it to have several companies such that once they take a loan with a company, and that company is compromised, they just move on to the next one,” he said.

The inclusion of BVN he added, would ultimately checkmate this fraudulent practice.

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“If you are able to use the BVN to tie him down, even if company ABC takes a loan, you can freeze company XYZ and that will put pressure on the debtor to pay his debts,” he said.

Lending his voice, an agent with Consecrated Law Firm, Mr Augustine Ukauzo, however fingered the non-application of due diligence by some banks as reason why they usually record a high failed loans returns.

According to him, bank officials can connive and give out huge amounts in loans to someone who did not have commensurate collateral or asset.

”There are also some scenarios where bank officials will give loans without a concrete documentation on how to locate the debtor.

”If the bank officials do what they are supposed to do, banks will not fail,” he said.

He said that the seminar would help the debt recovery agents to know some of the new areas and improvements in the NDIC Act of 2023.