The Nigeria Deposit Insurance Corporation (NDIC) is currently overseeing the assets of nearly 600 failed banks as part of efforts to recover outstanding loans and settle depositors’ claims. The agency says it is intensifying collaboration with debt recovery agents to ensure full recovery of risk assets under its mandate.
Speaking at a sensitisation seminar for debt recovery agents in Abuja, Mrs Patricia Okosun, Director of the Asset Management Department at the NDIC, disclosed that the corporation is managing assets linked to over 560 Microfinance Banks and about 32 Deposit Money Banks that have ceased operations.
Okosun explained that the agency’s focus is on recovering loans and advances issued by the defunct banks while they were operational. She said the proceeds from recovered debts would be used to reimburse depositors, particularly the uninsured portions of their funds.
According to her, the seminar was organised to familiarise recovery agents with the provisions of the NDIC Act 2023, which grants the corporation expanded authority in pursuing outstanding debts. She noted that these statutory powers are extended to appointed agents to enhance efficiency in asset recovery.
She emphasised that the corporation’s objective is to ensure that all outstanding loans are pursued diligently in order to meet its deposit guarantee obligations.
Also speaking at the event, Mr Olufemi Kushimo, Director of the Legal Department at the NDIC, said the Act serves as a comprehensive legal framework designed to strengthen the corporation’s debt recovery process. He stated that improved cooperation between the NDIC and recovery agents would accelerate loan recovery and improve outcomes for depositors.
Kushimo added that the agency considers recovery agents as strategic partners in fulfilling its mandate and pledged continued engagement to improve operational processes.
During discussions at the seminar, some recovery agents proposed additional measures to enhance loan traceability. Dr Abdullahi Tahir, an NDIC agent, suggested that the Bank Verification Number (BVN) should be made mandatory for loan issuance.
Tahir argued that linking loans to BVNs would help prevent borrowers from using multiple companies to evade repayment. He explained that some debtors register several entities, and when one defaults, they continue operations under another company name. He said integrating BVN into loan documentation could allow regulators to track associated entities and improve enforcement.
Another agent, Mr Augustine Ukauzo of Consecrated Law Firm, identified weak due diligence practices by some former bank officials as a major obstacle to recovery. He said that in certain cases, loans were granted based on personal relationships without adequate documentation or collateral.
Ukauzo noted that insufficient records and lack of commensurate security have made the recovery process more complex, particularly in cases involving defunct banks.
The NDIC maintains that strengthened enforcement under the NDIC Act 2023 and closer coordination with recovery agents will improve asset realisation and support the timely payment of depositors affected by bank failures.
