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Senate considers bill to track loan defaulters

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Senate considers bill to track loan defaulters
A bill seeking to facilitate and improve credit repayment culture by empowering creditors bank to track loan defaulters account through the Bank Verification Number, BVN, recover past and due obligation without recourse to borrower, provide penalities for breaches and violations of obligations as well as enhance loan recovery across banking sectors, yesterday passed second reading on the floor of the Senate

Sponsor of the bill, Senator Mohammed Sani Musa (APC Niger East), in his lead debate 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.”

According to the lawmaker, “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.”

Musa, however, explained that the need for the introduction of 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’s of the credit system.

“Today, the situation in Nigeria has become very serious and seemingly intractable and thereby frustrate 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,” the lawmaker said.

The bill was referred by the Deputy Senate President, Ovie Omo-Agege, who presided over plenary, to the Committee on Banking, Insurance and Other Financial Institutions for further legislative work and submit its report within four weeks.

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