The Central Bank of Nigeria has restricted banking services for large-scale loan defaulters, cutting off their access to fresh credit, letters of credit, performance bonds, and other trade instruments. The move marks a decisive end to years of regulatory forbearance that allowed well-connected borrowers to accumulate debt with little consequence.
The CBN issued the directive on Wednesday, following remarks by Governor Olayemi Cardoso at the 4th Annual IMF/AFRITAC West 2 High-Level Executive Forum in Abuja. It targets “large-ticket obligors” — individuals and corporations carrying significant debts classified as non-performing in the Credit Risk Management System. “By curbing access to banking services for chronic defaulters, we are reinforcing the culture of repayment, protecting depositors, and safeguarding the stability of the financial system,” the bank said.
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At its core, the policy targets a practice known as “credit jumping” — where defaulters move between banks to accumulate fresh debt without settling what they already owe. By restricting not just direct lending but also trade instruments and contingent liabilities, the CBN is making it far harder for delinquent borrowers to remain active in the financial system.
Cardoso framed the directive as part of a broader regulatory reset. “Our stance on corporate governance is unequivocal: zero tolerance for violations,” he said. The bank’s immediate concern, he added, is protecting the N4.61 trillion in fresh capital recently attracted by the sector. That capital, he warned, must not fall victim to the same patterns of abuse that have historically weakened Nigerian banks.
Beyond the crackdown on defaulters, Cardoso also used the forum to reaffirm a wider shift in direction. The CBN is moving away from the development lending and sectoral interventions that defined previous administrations. Instead, it is returning to orthodox monetary policy — prioritising price stability and traditional regulatory tools. “The CBN remains firmly anchored in orthodox monetary policy, focused on restoring price stability, strengthening policy credibility, and anchoring expectations through discipline and consistency,” he said.