News

CBN Cracks Down on Loan Defaulters, Bars Access to New Credit

Published by Samuel Ayomide on March 13th, 2026.

The Central Bank of Nigeria (CBN) has instructed banks to deny additional credit facilities and certain banking services to large borrowers with non-performing loans, in a move aimed at reinforcing credit discipline across the nation’s banking sector.

According to a circular dated March 12, 2026, signed by the Director of Banking Supervision, Olubukola Akinwunmi, borrowers whose loans are classified as non-performing and recorded in the Credit Risk Management System (CRMS) or any licensed private credit bureau will no longer qualify for new loans or credit facilities (according to Nairametrics).

The apex bank emphasized that the restrictions are intended to reduce systemic risks posed by large-scale defaults, which could potentially destabilize the financial sector.

“Effective immediately, all financial institutions shall restrict further credit access for any large-ticket obligor with a non-performing facility recorded in the CRMS and/or licensed private credit bureaus. This restriction covers loans, direct credit facilities, and contingent banking instruments including letters of credit, bankers’ confirmations, performance bonds, or advance payment guarantees,” the circular read.

The CBN clarified that the policy targets large-ticket obligors—individuals or companies whose combined exposures exceed the Single Obligor Limit or whose financial obligations could significantly impact a bank’s capital adequacy ratio. Banks have also been directed to secure additional realisable collateral from affected borrowers to safeguard existing loan exposures.

The directive builds on a previous CBN policy issued in June 2024, which barred loan defaulters from accessing new credit facilities within the banking system. Analysts suggest the latest move comes amid mounting concerns over rising bad loans and delinquent credit portfolios in the Nigerian banking sector (according to The Guardian Nigeria).

Financial institutions are expected to rely on CRMS data and reports from licensed private credit bureaus to identify borrowers affected by the new restrictions, ensuring compliance and minimizing potential risks to banks’ balance sheets.

Industry observers note that while the policy may tighten liquidity for some large borrowers, it reinforces a long-term effort to cultivate disciplined lending practices and protect the stability of Nigeria’s financial system.