Central Bank of Nigeria has proposed setting up a mediation panel to resolve loan-related disputes, with the goal of reducing the need for court involvement in secured lending cases.
The plan was detailed in a circular signed by P. I. Oluikpe, Acting Director of the Development Finance Advisory Department, which invited stakeholders to review draft guidelines for creating 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 aims to strengthen the financial system by offering a specialised and more affordable platform for resolving disputes tied to loans secured with 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 proposed guidelines are intended to create a structured, efficient, and transparent process for handling disputes, thereby boosting 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 proposal, the panel will rely on alternative dispute resolution methods and is expected to conclude cases within 90 days of the first hearing. Parties will also be required to consent to the panel’s authority and show that they attempted informal resolution before escalating matters.
“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 is expected to include professionals from law, banking, finance, and dispute resolution, each with a minimum of 10 years’ experience. The CBN plans to appoint 30 members, with smaller three-person panels handling cases on a rotational basis.
Decisions reached by the panel will be 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 still challenge decisions on limited legal grounds within set timelines.
The framework also stresses confidentiality, ensuring that all proceedings and shared information remain protected. Funding will come from CBN support, administrative charges, and other contributions, while stakeholders have been asked to provide feedback before the October 9, 2026 deadline.
This move follows recent actions by the apex bank aimed at improving credit discipline, including measures restricting banking access for individuals with non-performing loans, as part of efforts to enhance financial system stability.