The Nigeria Consumer Credit Corporation (CrediCorp) has warned lenders against using abusive, threatening or unlawful methods to recover debts, stressing that being unable to repay a loan does not in itself constitute a crime.
The warning comes amid growing concerns over aggressive debt-recovery practices by some lenders, particularly within Nigeria’s expanding digital lending industry.
CrediCorp calls for responsible debt recovery
CrediCorp said lenders must distinguish between a borrower who has defaulted on a legitimate financial obligation and a person who has committed a criminal offence.
The corporation emphasised the importance of protecting borrowers’ rights while ensuring that legitimate lenders can recover money owed to them through lawful processes.
The warning is particularly relevant as Nigeria works to expand access to formal consumer credit and establish a stronger credit culture.
Borrowers have rights
As Nigeria’s consumer-credit market expands, regulators and industry stakeholders have increasingly stressed the need for responsible lending and borrowing.
CrediCorp’s position is consistent with the broader principle that borrowers should not be subjected to harassment, intimidation, public humiliation or other unlawful recovery methods simply because they have outstanding debts.
At the same time, borrowers remain responsible for honouring legitimate loan agreements and should communicate with lenders when they face difficulties meeting repayment obligations.
Nigeria’s credit market is expanding
The Federal Government established CrediCorp to help expand access to consumer credit and build a stronger credit infrastructure in Nigeria.
The corporation’s mandate includes supporting responsible lending, improving access to credit and strengthening credit assessment systems.
CrediCorp has previously said that credit scores and repayment history can become an important financial asset for Nigerians seeking access to future credit.
The development of a functioning credit system is expected to make it easier for individuals and businesses with good repayment records to access financing.
The problem of aggressive loan recovery
Nigeria’s rapid growth in digital lending has also generated concerns about how some loan companies pursue customers who default.
Earlier discussions around consumer credit in Nigeria have highlighted the need for clear rules on interest rates, disclosure requirements, debt collection and borrower protection.
Some Nigerians have complained about practices such as repeated calls, contacting friends or relatives, threats and other forms of pressure.
The latest warning from CrediCorp reinforces the need for lenders to use legitimate recovery channels rather than methods that violate borrowers’ rights.
What borrowers should do when they cannot repay
Financial difficulties do not automatically remove a borrower’s obligation to repay a legitimate loan.
However, borrowers facing repayment problems should:
- Contact the lender as soon as possible.
- Request a realistic repayment arrangement.
- Keep records of all communications and payments.
- Read the terms of any restructuring agreement carefully.
- Report harassment or unlawful conduct to the appropriate authorities.
- Avoid taking another expensive loan simply to repay an existing one without understanding the consequences.
Building a healthier credit culture
Nigeria’s consumer-credit system can only succeed if both lenders and borrowers understand their responsibilities.
Lenders need reliable systems for assessing borrowers, pricing risk and recovering legitimate debts within the law.
Borrowers, on the other hand, need greater financial literacy and should understand the cost and conditions attached to loans before accepting them.
CrediCorp has argued that Nigeria’s credit system should ultimately promote economic inclusion and opportunity, rather than push citizens into unsustainable debt.
The bigger picture
As Nigeria seeks to expand formal credit access, the balance between lender protection and consumer protection will become increasingly important.
The message from CrediCorp is clear: loan repayment obligations are real, but debt collection must remain lawful and respectful of borrowers’ rights.
OnPointGist will continue to follow developments in Nigeria’s consumer-credit sector, financial inclusion and borrower protection.
