The Central Bank of Nigeria (CBN) says it is unaware of crude debt recovery methods adopted by some microfinance banks.

It, however, said it is taking steps to ‘curb the use of inhumane and unethical debt recovery practices.”

In response to an earlier enquiry on its position over the reported cases of harassment of debtors by some microfinance institutions, the Central Bank of Nigeria (CBN) has distanced itself from the allegations.

In a mail sent to PREMIUM TIMES on Monday, the CBN said it is not aware of the practices and never approved of the unethical and embarrassing methods deployed by the said banks to recover debts from their customers.

The mail was signed on behalf of the Director of the Consumer Protection Department by an official, I. Yahaya.

PREMIUM TIMES had earlier reported the pain, frustration and embarrassment suffered by customers of some microfinance institutions over failure to repay loans drawn from them. The report was titled; ‘Breasts on lantern’: Agonies of Nigerian microcredit loan borrowers.

The CBN had promised to investigate the matter and said it would make its position known to the newspaper.


In its statement, apex bank said it had earlier in 2016 issued a Consumer Protection Framework (CPF) requiring financial institutions under its regulatory purview to adopt debt recovery processes ”that are courteous and fair to consumers, amongst other things”.



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Central bank of Nigeria building
‘Breasts on lantern’: CBN speaks on banks’ ‘inhumane, unethical debt recovery practices’
June 14, 2019Mojeed Alabi
The Central Bank of Nigeria (CBN) says it is unaware of crude debt recovery methods adopted by some microfinance banks.


It, however, said it is taking steps to ‘curb the use of inhumane and unethical debt recovery practices.”

In response to an earlier enquiry on its position over the reported cases of harassment of debtors by some microfinance institutions, the Central Bank of Nigeria (CBN) has distanced itself from the allegations.

In a mail sent to PREMIUM TIMES on Monday, the CBN said it is not aware of the practices and never approved of the unethical and embarrassing methods deployed by the said banks to recover debts from their customers.


The mail was signed on behalf of the Director of the Consumer Protection Department by an official, I. Yahaya.

PREMIUM TIMES had earlier reported the pain, frustration and embarrassment suffered by customers of some microfinance institutions over failure to repay loans drawn from them. The report was titled; ‘Breasts on lantern’: Agonies of Nigerian microcredit loan borrowers.

The CBN had promised to investigate the matter and said it would make its position known to the newspaper.


In its statement, apex bank said it had earlier in 2016 issued a Consumer Protection Framework (CPF) requiring financial institutions under its regulatory purview to adopt debt recovery processes ”that are courteous and fair to consumers, amongst other things”.

The statement reads in part; “The CPF further stipulates that consumers should be proactively engaged and given early notice of outstanding obligations prior to the commencement of debt collection actions.

“Where consumers are however unable to meet their financial obligations, financial institutions are to adopt fair and ethical debt recovery practices.”


CBN added that the consumer protection department is currently developing guidelines on responsible business conduct for financial institutions “to curb the use of inhumane and unethical debt recovery practices.”

“Stakeholders are enjoined to always bring incidences of unethical debt recovery practices to the attention of the CBN for prompt regulatory intervention,” the statement noted.









Source: https://www.premiumtimesng.com/business/business-news/335005-breasts-on-lantern-cbn-speaks-on-banks-inhumane-unethical-debt-recovery-practices.html

They expect us to believe that they are unaware?! Please tell that to the marines!












please check my signature

Well. I believe those MFB are always exploring loopholes in the system. But again, I believe CBN is very much aware because if they were not aware as the direct head and indirect head of all financial institutions that means Nigerian financial system is broken and blind to the middle and lower cast of our society.

herakles:
They expect us to believe that they are unaware?! Please tell that to the marines!












please check my signature

How will CBN be able to fine the defaulting Microfinance banks millions of Naira if they claim to be aware.

herakles:
They expect us to believe that they are unaware?! Please tell that to the marines!



please check my signature

They may really be unaware, but you can't blame the banks though, most people would not bother repaying their loans until they're pushed even when things get better....

I have a pal who works with one of these MFBs, she dreads going to work because she has to sheath all "morals" and cuss the daylights out of people's mama and papa before they're compelled to pay.


It's a tough world..

SenatorJames:

How will CBN be able to fine the defaulting Microfinance banks millions of Naira if they claim to be aware.

They deliberately turned a blind eye to all these things!

czarina:
They may really be unaware, but you can't blame the banks though, most people would not bother repaying their loans until they're pushed even when things get better....

I have a pal who works with one of these MFBs, she dreads going to work because she has to sheath all "morals" and cuss the daylights out of people's mama and papa before they're compelled to pay.


It's a tough world..

really unfortunate

herakles:



They deliberately turned a blind eye to all these things!

For good reasons if they truly did

It's best to feign ignorance on these things if it helps banks recover their debts.... If you leave a significant percentage of Nigerian debtors, most will likely not pay up.

herakles:



They deliberately turned a blind eye to all these things!

Sure. Even though the only language some people understand is violence, we can't totally blame the banks.
Furthermore, its not the banks that teach their staff to be violent but the pressure the staff receive in case of default. So indirectly, the banks will still be blame.