Thursday, April 16, 2026 -The Central Bank of Nigeria has proposed the creation of a mediation panel to handle loan-related disputes, aiming to reduce reliance on courts in secured lending transactions.
The proposal was outlined in a circular signed by P. I.
Oluikpe, Acting Director of the Development Finance Advisory Department,
inviting stakeholders to review draft guidelines for establishing a Mediation
and Dispute Resolution Panel under the Secured Transactions in Movable Assets
framework.
“The Panel shall, to the exclusion of any court of law or
body in Nigeria, exercise first instant jurisdiction to hear and determine any
dispute arising from the operation and application of the Act,” the apex bank
stated.
According to the CBN, the initiative is designed to
strengthen the financial ecosystem by providing a specialised and
cost-effective platform for resolving disputes linked to lending backed by
movable assets.
“The Central Bank of Nigeria is developing guidelines and
modalities for the operation of a Mediation and Dispute Resolution Panel,” the
circular added. The move is anchored on the Secured Transactions in Movable
Assets Act, which provides for mediation as the first point of dispute
resolution between creditors and borrowers.
The bank explained that the guidelines aim to ensure a
structured and efficient system for handling disputes while improving
confidence in asset-backed lending. “The key objective of the MDRP guidelines
is to establish a clear and standardised procedure for managing STMA-related
disputes, while ensuring transparency, fairness and efficiency,” the CBN said.
Under the proposed framework, the panel will adopt
alternative dispute resolution mechanisms and is expected to deliver decisions
within 90 days of the first hearing. Parties must agree to the panel’s
jurisdiction and show that they attempted informal resolution methods before
escalating disputes.
“Parties shall demonstrate that they had made efforts to
resolve the dispute through other informal means such as negotiations before
escalation to the Panel,” the document stated.
The panel will consist of professionals from law, banking,
finance and dispute resolution, each with at least 10 years’ experience. The
CBN plans to appoint 30 members, with smaller panels of three constituted on a
rotational basis.
Decisions of the panel will be legally binding and
enforceable in court. “The award shall be legally binding on the parties and
enforceable in court as a consent judgment or consent award,” the document
noted. However, parties may appeal decisions on limited legal grounds within
specified timelines.
The framework also emphasizes confidentiality, stating that
all proceedings and shared information must be protected. Funding for the panel
will come from CBN support, administrative fees and other contributions, while
stakeholders have been invited to submit feedback before the October 9, 2026
deadline.
The development follows recent measures by the CBN to tighten credit discipline, including directives restricting access to banking services for borrowers with non-performing loans, as part of broader efforts to strengthen financial system stability.
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