Nigeria's Central Bank Cracks Down on High-Risk Borrowers With Tougher Loan Rules
The Central Bank of Nigeria (CBN) has introduced stricter rules for borrowers with large, non-performing loans. These measures aim to protect the financial system and enforce better credit discipline among banks and customers. The new directive will limit access to certain banking services for affected borrowers.
Under the latest policy, borrowers with unpaid loans recorded in the Credit Risk Management System (CRMS) or any licensed private credit bureau will no longer qualify for new credit. The restrictions specifically target large-ticket obligors—those whose combined loans across banks exceed the Single Obligor Limit. Such defaults must also pose a risk to a bank's Capital Adequacy Ratio or threaten the broader financial system.
Banks have been instructed to demand additional realisable collateral from these borrowers to secure their existing loans. The CBN will closely monitor compliance and impose penalties on institutions that fail to follow the rules. This move follows earlier directives from the regulator to curb credit abuse in the banking sector.
The policy does not affect all borrowers, only those with significant outstanding debts that could destabilise the financial system. By tightening these controls, the CBN hopes to reduce systemic risks and improve loan repayment rates.
The new measures will force banks to reassess their lending practices and demand stronger security from high-risk borrowers. Affected customers will face stricter conditions before accessing further credit. The CBN's enforcement of these rules is expected to strengthen the stability of Nigeria's banking sector.
