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Tuesday, May 17, 2022

A senior lawyer seeks legal framework to aid debt recovery in banks, other institutions

A legal practitioner has suggested that the country should have legal framework for debt recovery to prevent recalcitrant debtors from going unpunished.

Oluwakemi Balogun of the firm of Oluwakemi LP, said the country need a national law that will assistant banks and other financial institutions to curb bad behaviour among debtors.

He called for the expansion of the laws that granted the Asset Management Corporation of Nigeria (AMCON) special debt recovery powers in the AMCON Act that would insulate the banking sector against reckless borrowers and recalcitrant debtors.

According to him, some Nigerians in the last 25 years have perfected the act of going to different banks to borrow money and have serially defaulted in the repayment agreement because the country has no policy that guides such recklessness.

Balogun, who spoke at the weekend at the training of Solicitors, Receivers and Receiver/Managers by Nigeria’s bad bank, said debt recovery in Nigeria will continue to burden AMCON as well as the financial sector as long as the system allows some Nigerians to brazenly walk into banks to borrow money with no intention to repay the loan obligation.

“We need to have a national law that will assistant lenders (banks and financial institutions). We must have a national policy. There must be a national law on debt recovery.

“This law should not just be for only AMCON as a government agency but for the nation as a whole.

“That is one of the ways we can curb the bad behaviour. In some other economies you cannot borrow money and refuse to pay back and go scot-free. Therefore, Nigeria should not allow recalcitrant debtors to go unpunished.”

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Balogun was reacting to the different presentations at the programme including the keynote address of the AMCON Managing Director/CEO who was represented at the event by Benedict Daminabo, a Group Head of Asset Management.

The AMCON CEO, Ahmed Kuru had earlier said the agency will continue to highlight the dangers of not recovering the debt because of its grave implication.

“We have repeatedly made the point at every opportunity that all stakeholders must view the AMCON mandate as one of serious national importance. If at sunset AMCON is unable to recover the huge debt of over N5 trillion, it becomes the debt of the Federal Government of Nigeria for which taxpayers’ monies will be used to settle.

“The implication is that the public will be made to pay for the recklessness of only a few individuals who continue to take advantage of the loopholes in our laws to escape their moral and legal obligations to repay their debts.

“As a matter of fact, we have reached a point in our country where all stakeholders (the federal government, the judiciary, the legislature and the public) must work together to fight the common enemy of this huge debt burden,” Ahmed said.

But challenging as the agency’s debt recovery activities have shown especially given its peculiar situation, AMCON is steadily making remarkable recoveries but still has about 7,902 outstanding obligors with total outstanding loan of N3.142 trillion.

Of this number, 350 of the agency’s obligors account for N2.053 trillion, which is above 65 percent of total outstanding amount.

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