The Central Bank of Nigeria (CBN) has moved to restructure how lending disputes are resolved, proposing that creditors and borrowers must first submit to a mediation panel before approaching the courts.
This follows a circular issued by the apex bank on Tuesday, inviting stakeholders to comment on draft guidelines for the Mediation and Dispute Resolution Panel under the Secured Transactions in Movable Assets framework.
The circular was signed by P. I. Oluikpe, Acting Director, Development Finance Advisory Department.
The proposed framework positions the panel as the first point of call for resolving disputes arising from collateral-backed lending, marking a shift from litigation-heavy processes to alternative dispute resolution mechanisms.
What the draft guidelines say
Under the draft guidelines, the Mediation and Dispute Resolution Panel is designed to serve as the primary platform for handling civil disputes between creditors and borrowers in secured lending transactions.
- The draft guidelines read, “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.
- “In the exercise of its jurisdiction, the Panel shall have the power to interpret any law, rule or regulation as may be applicable to secured transactions in movable assets under the Act, and the United Nations Commission on International Trade Law (UNCITRAL) Model Law.
- “All parties to a dispute before the Panel shall consent and submit to its jurisdiction.”
The framework draws its authority from the Secured Transactions in Movable Assets Act, 2017, which already recognises the panel as the first recourse for dispute resolution.
The CBN is now operationalising this provision by outlining procedures, roles and enforcement mechanisms.
Notably, the panel is granted first instance jurisdiction over such disputes, effectively requiring parties to exhaust mediation before pursuing litigation.
Both creditors and borrowers are expected to consent to the panel’s authority as part of their lending agreements.
90-day resolution window, binding awards introduced
The draft guidelines introduce a structured and time-bound dispute resolution process, with the panel expected to deliver decisions within 90 days of the first hearing.
To ensure enforceability, awards issued by the panel will be legally binding and can be enforced in court as consent judgments.
Parties are required to comply with decisions within 30 days, failing which the awards may be registered at the Federal High Court for enforcement.
The framework also allows for interim and partial awards before final decisions, while settlements reached by parties can be adopted as final awards by the panel.
Appeals are permitted, but only on points of law or mixed law and fact, and must pass through a High Court review before reaching the Court of Appeal.
Framework targets confidence, faster credit access
The CBN said the panel is intended to provide a specialised and cost-effective platform for resolving disputes tied to movable asset-backed lending, covering issues around creation, perfection and enforcement of security interests.
Eligibility conditions for disputes include the existence of a valid security agreement, a mediation clause recognising the panel, and proof that the security interest has been registered with the National Collateral Registry.
The guidelines also require parties to demonstrate prior good faith efforts to resolve disputes before approaching the panel, reinforcing the push towards non-adversarial resolution.
Stakeholders have been given until October 9, 2026, to submit comments on the draft guidelines as part of the CBN’s inclusive policymaking process.
What you should know
The new guidelines were proposed about a month after the CBN directed banks to restrict access to certain banking services for large-ticket borrowers with non-performing loans, as part of efforts to safeguard financial system stability and strengthen credit discipline.
The apex bank gave this directive in a letter sent to all banks dated March 12, 2026, and signed by the Director of Banking Supervision, Olubukola Akinwunmi.
According to the CBN, borrowers whose loan facilities are classified as non-performing and recorded in the Credit Risk Management System (CRMS) or any licensed private credit bureau will no longer be eligible to access additional credit facilities.
