Bill to blacklist loan defaulters in Nigeria scales second reading

The Senate on Tuesday considered A bill seeking to improve credit repayment culture, reduce non-performing loans in the banking sector, and streamline loan recovery watch-list on loan defaulters with the view to track and blacklist them has passed through second reading at the Senate.

Deputy Senate President, Ovie Omo-Agege, who presided over plenary, referred the bill to the Committee on Banking, Insurance and Other Financial Institutions for further legislative work.

In his lead debate, the sponsor of the bill, Senator Mohammed Sani Musa (APC – Niger East), noted that “the core of the financial system of any country are the commercial banks, because they have the potential to apply the full weight of their credit facilities for the development and growth of the country’s economy.”

He stated that “credit is seen as the blood stream of the banking business”, adding that, “the situation in Nigeria demands an injection of a healthy bank credit and recovery system that will effectively fasten the pace of growth.”

Senator Musa explained that the  bill was intended to insulate commercial banks and financial institutions from “bad borrowers” that constantly default on loan repayment.

“Before the deregulation of our banking system, the ability of our banks to recover loans has been the bedrock behind the collapse of many commercial banks with a dire consequence to many innocent account holders, which have resulted in collapse of their businesses, loss of savings and even death.

“In many instances, most economies have consequently experienced high level and increasing rates of unemployment as a result of such negligence of the credit system.

“Today, the situation in Nigeria has become very serious and seemingly intractable and thereby frustrates our effort as a nation toward private driven economy as well as economic diversification and growth.

“In light of the above, there is only one obvious option left for any country where policy measures failed, which is to urgently enact legislation that will address the problems once and for all,” Musa said.

In a related development, Senate after second reading, referred two bills to committee, namely bill seeking to establish the Nigerian French Language Village; and bill on the Federal University of Ankpa, Kogi State Chamber. The bills were  referred to the Committee on Tertiary Institutions and TETFUND for further legislative work.

The bills were sponsored by Senator Olamilekan Solomon Adeola (APC – Lagos West); and Senator Jibrin Isah (APC – Kogi East) respectively.