The Nigeria Deposit Insurance Corporation (NDIC) has expressed concern over the refusal of some borrowers to repay outstanding loans obtained from failed banks, warning that the development is slowing efforts to recover funds belonging to depositors of liquidated financial institutions.
The corporation said some debtors were deliberately frustrating recovery activities through asset concealment, unnecessary legal delays and intimidation of officials involved in the process.
The Director of the Asset Management Department of NDIC, Ogungbemi Theophilus, disclosed this on Monday during the corporation’s Stakeholders’ Seminar and Public Relations Workshop held at Exclusive Serene Hotels and Suites in Wuye, Abuja.
According to him, some borrowers wrongly assume that the revocation of a bank’s operating licence automatically removes their responsibility to repay outstanding loans.
He explained that the corporation continues to face difficulties recovering loans from customers who fail to honour their financial obligations after the institutions that granted the facilities have been closed.
Theophilus stressed that the closure of a bank does not cancel the debts owed to it, adding that borrowers remain responsible for settling their outstanding obligations.
He noted that loan recovery remains one of the most challenging aspects of the bank liquidation process because some debtors employ different strategies to delay or prevent the recovery of assets.
The NDIC director explained that prolonged recovery processes could reduce the value of assets belonging to failed financial institutions. For instance, buildings left unoccupied for extended periods may deteriorate, while equipment and other physical properties may lose value over time.
He warned that these delays ultimately affect depositors waiting to receive their outstanding funds.
According to him, every delay in recovering loans and converting assets into cash slows the process of settling claims, particularly for customers whose deposits exceed the insured limits.
The NDIC is responsible for managing loans, physical assets and investments belonging to closed deposit money banks, primary mortgage banks and microfinance banks.
Its Asset Management Department is mandated to recover outstanding debts, dispose of properties and investments and convert recovered assets into cash for distribution to eligible depositors.
The corporation explained that depositors of deposit money banks, non-interest banks and mobile money operators are insured up to ₦5 million per depositor per bank. Depositors of microfinance banks, primary mortgage banks and payment service banks are covered up to ₦2 million.
While the existing insurance coverage fully protects approximately 99 per cent of depositors, customers whose balances exceed the insured limits depend on liquidation dividends to recover the remaining portions of their deposits.
This means that the recovery of outstanding loans and the successful disposal of assets remain important to the settlement of uninsured claims.
Theophilus also disclosed that the corporation conducted public auctions on November 3 and 4, 2026, to dispose of physical assets belonging to Union Homes Savings and Loans, Heritage Bank and Resort Savings and Loans.
The exercises were conducted in Lagos, Taraba and Adamawa states through appointed auctioneers.
He further warned professionals involved in asset recovery against insider dealings, deliberate undervaluation of properties, collusion with buyers and diversion of proceeds.
The corporation is also developing a comprehensive Asset Management Policy to strengthen asset identification, documentation, valuation, disposal procedures and accountability.
The development highlights the importance of effective loan recovery in protecting depositors and maintaining confidence in Nigeria’s financial system.
For the NDIC, recovering debts is not simply an exercise in collecting outstanding loans. It is also an important part of ensuring that customers affected by bank closures receive the funds due to them.
