The Central Bank of Nigeria (CBN) has introduced fresh measures to curb loan defaults, restricting access to banking services for chronic debtors and large borrowers with non-performing loans.
The directive follows remarks by CBN Governor Olayemi Cardoso at the 4th Annual IMF/AFRITAC West 2 High-Level Executive Forum in Abuja.
Cardoso said the move signals a decisive shift in the regulator’s approach, stressing that the era of regulatory leniency for delinquent borrowers has come to an end.
He explained that the policy is part of broader efforts to strengthen corporate governance and protect the approximately N4.61 trillion in fresh capital recently injected into the banking sector.
“Our stance on corporate governance is clear—there will be zero tolerance for violations. By ending years of regulatory forbearance, we have reinforced accountability and strengthened compliance across the system,” he said.
Under the new framework, individuals and entities classified as “large-ticket obligors” with non-performing loans in the Credit Risk Management System will face strict limitations.
The restrictions extend beyond access to new loans, covering key banking instruments such as letters of credit, guarantees, and other trade-related facilities.
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According to the CBN, the objective is to promote a stronger repayment culture and prevent practices such as “credit hopping,” where defaulters move between banks to accumulate additional debt.
The apex bank said the policy would enhance financial discipline, protect depositors, and support overall stability in the banking system.
“By restricting access to banking services for chronic defaulters, we are reinforcing credit discipline and safeguarding the integrity of the financial system,” the bank stated.
In addition to the enforcement measures, Cardoso reaffirmed the CBN’s commitment to orthodox monetary policy, emphasising a renewed focus on price stability and policy credibility.
He noted that the bank is moving away from unconventional interventions and direct sectoral financing, opting instead for traditional monetary tools aimed at controlling inflation and stabilising the naira.
For years, Nigeria’s banking sector has grappled with high-profile loan defaults involving wealthy individuals and large corporations, often referred to as large-ticket obligors.
Such defaults have historically posed risks to bank liquidity and undermined confidence in the financial system.
The latest directive signals a stronger regulatory stance, as the CBN seeks to enforce accountability, restore discipline, and build a more resilient banking sector.
