The Central Bank of Nigeria has proposed the creation of a mediation panel to handle loan-related disputes, aiming to reduce reliance on courts in secured lending transactions.
The proposal was outlined in a circular signed by P. I. Oluikpe, Acting Director of the Development Finance Advisory Department, inviting stakeholders to review draft guidelines for establishing a Mediation and Dispute Resolution Panel under the Secured Transactions in Movable Assets framework.
“The Panel shall, to the exclusion of any court of law or body in Nigeria, exercise first instant jurisdiction to hear and determine any dispute arising from the operation and application of the Act,” the apex bank stated.
According to the CBN, the initiative is designed to strengthen the financial ecosystem by providing a specialised and cost-effective platform for resolving disputes linked to lending backed by movable assets.
“The Central Bank of Nigeria is developing guidelines and modalities for the operation of a Mediation and Dispute Resolution Panel,” the circular added. The move is anchored on the Secured Transactions in Movable Assets Act, which provides for mediation as the first point of dispute resolution between creditors and borrowers.
The bank explained that the guidelines aim to ensure a structured and efficient system for handling disputes while improving confidence in asset-backed lending. “The key objective of the MDRP guidelines is to establish a clear and standardised procedure for managing STMA-related disputes, while ensuring transparency, fairness and efficiency,” the CBN said.
Under the proposed framework, the panel will adopt alternative dispute resolution mechanisms and is expected to deliver decisions within 90 days of the first hearing. Parties must agree to the panel’s jurisdiction and show that they attempted informal resolution methods before escalating disputes.
“Parties shall demonstrate that they had made efforts to resolve the dispute through other informal means such as negotiations before escalation to the Panel,” the document stated.
The panel will consist of professionals from law, banking, finance and dispute resolution, each with at least 10 years’ experience. The CBN plans to appoint 30 members, with smaller panels of three constituted on a rotational basis.
Decisions of the panel will be legally binding and enforceable in court. “The award shall be legally binding on the parties and enforceable in court as a consent judgment or consent award,” the document noted. However, parties may appeal decisions on limited legal grounds within specified timelines.
The framework also emphasises confidentiality, stating that all proceedings and shared information must be protected. Funding for the panel will come from CBN support, administrative fees and other contributions, while stakeholders have been invited to submit feedback before the October 9, 2026 deadline.
The development follows recent measures by the CBN to tighten credit discipline, including directives restricting access to banking services for borrowers with non-performing loans, as part of broader efforts to strengthen financial system stability.