The Business Recovery and Insolvency Practitioners Association of Nigeria has lamented that the high cost of doing business in the country and competition from imports are the major drivers of Non-Performing Loans in the country.
Speaking on the sidelines of a press briefing to herald its annual insolvency law conference 2025 on Friday, scheduled to hold on September 25 and 26 2025 in Lagos, the first Vice President and Co-Chair, Conference Planning Committee, BRIPAN, Mr. Albert Folorunsho, also said the lack of working capital is also a reason for rising NPLs in Nigeria.
In his words, “It is the state of the economy and competition from imports. The cost of doing business, mainly the rivers of NPLs. Most time, when they give out loans and set up businesses, they don’t have working capital.
“So when you are struggling to have working capital to do your business, meanwhile, the loan you took to buy the assets has already started, and they become due for payment. So, this is what runs businesses into trouble majorly in Nigeria,” he said.
His comments are apt considering the rise of NPLs in the financial statements of banks, which he said are in trillions.
Speaking on the forthcoming conference, he said the topics would focus on how banks can move from insolvency to other alternative dispute resolution, market insights, and new trends in insolvency rules, and how the insolvency rule in the CAMA 2020 fared so far, looking at proper rescue as against the old provision regarding receivership, takeover and selling properties of companies.
According to him, the focus now is on targeting business rescue and restructuring, where businesses can be restructured to continue in business amid financial challenges.
This is what we have this year, and we now have provisions in the law that give BRIPAN the roots to practice as an insolvency practitioner, which is contained in CAMA. If you look at sections 705 and 706 of CAMA, it gives BRIPAN the right to oversee practitioners.
“So you need to register with BRIPAN to be able to practice amongst other professions that are recognised by CAMA. This year, we have over 2000 members and we expect more than 80 per cent of them to be present at this conference, and of course, we also expect the bankers, because they are the one who gives out a credit facility.
“We are going to be looking at how to deal with NPLs and investments of financial institutions. We are aware that banks were required to make full provisions for their forbearance loans, and it has been a major issue, and this has to be dealt with,” he stressed.
NPLs have become a growing concern in Nigeria’s financial sector, with economic headwinds pushing more borrowers into default. An NPL is a loan in which the borrower is unable to meet scheduled repayments—typically 90 days or more overdue—thus becoming a liability to the bank.
According to data from the Central Bank of Nigeria, the industry NPL ratio, though within regulatory thresholds, has seen a steady uptick due to macroeconomic instability, currency volatility, rising import costs, and energy price shocks.
The situation has been worsened by foreign exchange shortages, inflation, and weak consumer demand, which together erode the profitability of businesses and their ability to service debt.
