CREDICORP WARNS LENDERS AGAINST HARSH DEBT RECOVERY TACTICS

The Nigerian Consumer Credit Corporation, CREDICORP, has warned lenders against using abusive or unlawful methods to recover debts, stressing that being indebted is not a criminal offence.

The corporation said lenders must respect the rights and dignity of borrowers while pursuing legitimate debt recovery.

CREDICORP noted that responsible lending and fair recovery practices were essential to building confidence in Nigeria’s growing consumer credit market.

It urged financial institutions and other credit providers to follow established laws and regulatory guidelines when recovering outstanding loans.

The corporation warned against practices that could amount to harassment, intimidation, public embarrassment or other forms of coercion against borrowers.

According to CREDICORP, financial difficulties do not automatically make a borrower a criminal, and lenders should distinguish between legitimate debt recovery and actions that violate consumers’ rights.

The corporation also encouraged lenders to strengthen their internal recovery systems and adopt transparent communication with customers who fall behind on repayments.

It said borrowers facing repayment difficulties should be given appropriate channels to discuss their circumstances and explore lawful repayment arrangements where applicable.

The warning comes amid the rapid expansion of Nigeria’s consumer credit market, with more financial institutions and digital lenders offering loans to individuals and small businesses.

CREDICORP maintained that the growth of the sector must be accompanied by responsible lending, clear disclosure of loan terms and effective consumer protection.

It urged borrowers to understand their repayment obligations before accepting credit and encouraged lenders to ensure that customers are treated fairly throughout the lending and recovery process.

The corporation said stronger adherence to responsible credit practices would help build trust, protect consumers and support the sustainable development of Nigeria’s credit ecosystem.