The banks have also noticed that majority of their borrowing customers have been unable to repay various types of loans they borrow to support their businesses and have reacted by mounting serious pressure on them to perform.

Some banks have even engaged the services of mean looking loan recovering agents to help.

The inability of borrowing customers to repay loans on time or not at all, reduces the capacity of banks to honour withdrawal demands from depositors.

Banks are required by CBN to deduct from their profit and/or capital any loan not repaid as at and when due. It’s called “Provisioning” in banking parlance.

Provisioning or deducting long unpaid loans of bank customers from bank’s profit or capital could make a bank post losses hence making it impossible to pay dividends to bank shareholders. Also, it could wipe off the bank’s capital and capacity to give more loans.

You want to repay bank loan and you can no longer meet obligations as at when due owing to the prevailing or harsh economic conditions, you have done no wrong.

Your condition will be deemed an offence if you fail to engage your bank on time.

If you find yourself in a bad debt situation, I advise that you demand to meet your branch manager if possible, in company of your lawyer. Narrate to the manager your difficulties in meeting your repayment obligations with evidence.

Tell the manager that it is your desire to meet the obligations as at when due but are being hampered by ever amorphous economic changes and challenges.

Demand for a restructure of the facility which will give you an extended time to repay based on your current but realistic cash flow.

Today’s branch manager is under pressure recover your bad and would want to hound you to agree to agree to a shorter repayment timelines but muster enough grit or resist the pressure. Stick to your proposal.

It your loan was an overdraft facility, demand for the removal of turnover covenant and clean-up cycle requirements that allow your bank to penalize you if you fail to meet a certain turnover levels because you can no longer guarantee sales levels and be able to pay down in time for the facility to be rolled over.

Gauge the countenance of the manager and if you suspect stubbornness, demand to see the head of the Bank’s Risk Management department or the supervising executive director.

Some relationship managers and bank managers could be annoyingly impossible and straight-jacketed. Many of them have no business background.

If your delinquent loans was Term Loan facility request that the bank extends the tenor of the term loan which should automatically reduce the amount of money you need to pay to service the facility.

The tenor shall be arrived at by ascertaining the minimum amount you can comfortably generate given the prevailing “bad market”. This is doable too; but expect some resistance from your relationship managers.

Also, demand that the bank reduces the interest rate on your loans in consideration of the bad economic realities. This, you may not get if your rates are below 25% p.a.

The rate concession you may get may depend on the size of the loan. Only a foolish banker would levy an uncollected interests. You may be lucky to get something better.

Your bank may ask that you bring additional collateral as a comfort. Give them, if you have and demand for interest rate reduction as you have reduced their risk by so doing.(read more on link below)

Yes, the lower the risk, the lower the returns or interest charged. Collaterals improve the risk rating of loans.

More importantly, ensure that you receive an offer letter conveying the agreed restructuring before you turn in the documents of the additional collateral in the spirit of mutual carefulness or caution.

When a loan goes bad the previously wonderful relationship between the banker and a customer would turn sour and would resemble that between a snake charmer and the snake being charmed. All must be at alert.

Also, do not ever think or assume that your discussion with a bank or the oral assurance from a bank official that your loan has been restructured is a deal.

Only a letter from the bank conveying an approval of your demands or negotiated agreement is considered a commitment.

Be warned! Bank’s management can overrule (and they always do) any oral assurance by any bank official irrespective of his or her rank. And once a promise to a customer is overruled, the official would start speaking in parables or become evasive while scheming with the recovery agents to foreclose your collateral because you can’t repay bank loan.

If while felling grieved about the bad turn of economic events, you react negatively by avoiding your banks in the hope that things would change for good, you are digging a big grave for your business.

Central Bank of Nigeria (CBN) has put in place systems that make it impossible for any bank borrower who allows his loan to go bad in one bank, to borrow from any other bank in Nigeria.

Banks are required to report all bad loan owners, stating the name of the business and their owners in an electronic register accessible to all the banks by a push of a button.

But, if you engage your banks early enough and get your loan restructured, you will avert hurting your business and yourself.

No bank will foreclose your collateral if you engage them on time. They all know that the economy is rough and with time you could meet up and repay bank loan.

You may need to have as friends, smart lawyers that will help you wade off any threat of economic strangulation from some bankers.

Not all humans including bankers are patient and understanding. Your faith in God could be shaken your darling bank’s disposition to your business misfortune.



At this trying time, I repeat, you need a prayer warrior in your lawyers. I mean, smart lawyers! Be bold to disengage your if he prefers instituting court cases to deny the loan than to take some legal steps to force the bank to the negotiation table.

A client is the lawyer’s source of daily bread. Note that a lawyer has nothing to lose if your case is messed up. Therefore, open your eyes as fish in water.

Also, you need to court the friendship of some grounded practicing or retired bankers to help you analyze delinquent loan restructure proposals or offer offers from your bank.


It is in your own self enlightened interest to initiate steps to find a solution to your bad loans with your bank, see more tips.

http://www.naaija.com/2017/07/answer-repay-bank-loan-without-panic/

Lalasticlala, Dominique, Puskin, Naijacutee, FOD