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The Central Bank of Nigeria is advancing plans to introduce a structured dispute resolution mechanism for loan-related conflicts, proposing the establishment of a mediation panel to handle disagreements between lenders and borrowers.
The initiative, outlined in a draft guideline issued by the apex bank, seeks to position the proposed Mediation and Dispute Resolution Panel as the first point of contact for disputes arising from secured lending transactions—particularly those backed by movable assets such as equipment, inventory, and receivables.
According to the circular signed by P. I. Oluikpe, Acting Director of the Development Finance Advisory Department, the framework is designed to promote faster, more cost-effective resolution of disputes while reducing pressure on the judicial system.
Under the proposed model, parties will be required to explore mediation through the panel before escalating cases to the courts, signalling a broader shift toward alternative dispute resolution within Nigeria’s financial ecosystem.
The initiative draws legal backing from the Secured Transactions in Movable Assets Act 2017, which provides the foundation for the use of movable assets as collateral and outlines provisions for structured dispute resolution.
The CBN said the panel will offer a specialised platform to address issues related to the creation, registration, and enforcement of collateral arrangements, with a strong emphasis on fairness, transparency, and efficiency.
To ensure timely outcomes, cases brought before the panel are expected to be concluded within 90 days from the first hearing. However, disputes must meet specific conditions before being admitted, including prior attempts at informal resolution, mutual agreement by parties to submit to mediation, and proper documentation of the underlying lending arrangement.
Eligible cases must also involve agreements registered with the National Collateral Registry and include mediation clauses within the contract terms.
The proposed panel will comprise a pool of 30 professionals drawn from law, banking, finance, and dispute resolution, each with a minimum of 10 years’ experience. From this pool, smaller three-member panels will be constituted on a rotational basis to handle individual cases, supported by a secretariat responsible for administration and case management.
Proceedings will involve submission of claims, document review, and hearings, which may be conducted physically, virtually, or through hybrid formats depending on the circumstances.
Decisions reached by the panel will be legally binding and enforceable through the courts as consent judgments, although limited rights of appeal will be available, particularly on points of law.
The framework also places strong emphasis on confidentiality, requiring all parties to protect information disclosed during the mediation process to preserve trust and integrity.
Funding for the panel is expected to come from a mix of regulatory support, administrative fees, and other contributions.
The CBN has invited stakeholders to review the draft guidelines and submit feedback by October 9, 2026, as part of efforts to refine the framework.
The proposed reform signals a broader push by the apex bank to strengthen credit infrastructure, improve dispute resolution efficiency, and enhance confidence in Nigeria’s lending environment.
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