The Central Bank of Nigeria (CBN) has revealed plans to integrate Primary Mortgage Banks (PMBs) and Microfinance Banks (MFBs) into the Global Standing Instruction (GSI) platform to tackle the growing challenge of non-performing loans in the financial sector.
This initiative, first implemented in August 2020, is designed to enhance loan recovery processes by enabling creditor banks to recover overdue debts from defaulting borrowers without their consent.
According to the CBN, this is achieved through a direct set-off from funds held in the borrower’s qualifying accounts across participating financial institutions.
CBN governor, disclosed the development during the 2024 Bankers’ Night held in Lagos. “Our strategy includes implementing model mortgage foreclosure laws to stimulate lending and reduce delinquency, integrating PMBs and MFBs into the GSI platform to minimise non-performing loans, and leveraging Development Finance Institutions (DFIs) more effectively to provide increased on-lending facilities to well-managed Other Financial Institutions (OFIs),” Cardoso said.
Cardoso highlighted the pivotal role OFIs play in boosting economic productivity and expanding access to financial services for underserved individuals and businesses.
“Other Financial Institutions hold significant potential to drive productivity and economic growth. To unlock this untapped potential, we aim to strengthen key institutions—particularly Primary Mortgage Banks and Microfinance Banks—to enhance their efficiency and impact,” he noted.
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