NDIC to embark on aggressive loan recovery

The Nigeria Deposit Insurance Corporation (NDIC) has stepped up efforts to recover outstanding loans and other risk assets of failed financial institutions, stressing that aggressive debt recovery is central to depositor protection and the stability of Nigeria’s financial system. Speaking on Thursday at a sensitisation programme for debt recovery agents in Abuja with the theme, […]

The Nigeria Deposit Insurance Corporation (NDIC) has stepped up efforts to recover outstanding loans and other risk assets of failed financial institutions, stressing that aggressive debt recovery is central to depositor protection and the stability of Nigeria’s financial system.

Speaking on Thursday at a sensitisation programme for debt recovery agents in Abuja with the theme, “Operationalising the provisions of the NDIC Act 2023 for effective debt recovery”, Director of the Asset Management Department, Mrs. Patricia Okosun, said loan recovery remains the most critical source of funds used to reimburse depositors of failed banks.

“What we are concerned with here are the risk assets, the loans and advances that were given out when the banks were still in operation,” Okosun said.

“These loans are what we recover and deploy to pay depositors after the insured sums have been settled,” she added.

She disclosed that NDIC currently manages assets from more than 600 failed financial institutions, spanning commercial banks, microfinance banks and other deposit-taking institutions.

“When a bank fails, all its assets are transferred to NDIC,” she said, adding, “Our mandate is clear: we must recover every recoverable loan because that is how we protect depositors and maintain confidence in the system.”

Also speaking, Director of Legal Services at NDIC, Mr. Kushimo Oladipo, said the NDIC Act enacted in 2023 significantly strengthened the Corporation’s authority, particularly in the area of debt recovery.

“The Act was improved to enhance the powers of NDIC because of the critical role debt recovery plays in deposit guarantee and financial system stability,” Oladipo said. “You cannot talk about depositor confidence without talking about how quickly and effectively we recover the assets of failed banks.”

He explained that payments to depositors beyond insured sums are largely dependent on the volume of assets realised from failed institutions.

“The insured sum and any additional payments are based on realised assets,” he said. “That is why speeded recovery of debt is not optional; it is essential.”

Linking NDIC’s recovery drive to broader economic goals, he said a stable banking system is fundamental to financial inclusion and growth.

“When people know their money is safe in the bank, they are encouraged to deposit,” he said. “That confidence allows funds to move from the surplus sector to the deficit sector of the economy, which is critical if Nigeria is to build a strong economy.”