Nigeria Commercial banks have listed numerous bad debtors in full-page newspaper adverts in line with directives from the central bank of Nigeria (CBN).
The move is aimed at avoiding a repeat of an industry bailout that cost the government $4bn six years ago.
The publication followed the expiration of a three-month time limit issued by the CBN in April for bad debtors to square up their accounts or be identified in Nigerian media, as well as barred from currency and government debt markets.
The CBN had asked commercial lenders to publish bad loans of $251 320 and more that were more than 365 days old, the time limit after which it considers money to be lost.
In 2009, the central bank rescued several banks that had lent mainly to the oil and gas sector shortly before crude prices collapsed and as the stock market turned sour, triggering a near collapse of eight commercial banks.
Fidelity Bank, Skye Bank, Zenith Bank, Enterprise Bank, Sterling Bank, Stanbic IBTC Bank and Guaranty Trust Bank (GT Bank) published as required the names of those who owed money, along with details of the sums outstanding.
The sharp fall in the global price of oil, Nigeria’s main export, triggered a currency crisis in Africa’s largest economy and strained government’s finances, while also harming the cashflow of some companies with foreign currency loans.
“This is an action taken by the banks supported by the central bank,” said Ibrahim Muazu, a spokesperson for the central bank, who added that naming and shaming bad debtors would occur on a quarterly basis.
The move to name those owing large sums is part of a raft of measures introduced by the central bank in an attempt to steady the economy. Last month it limited importers’ access to dollars, in order to save its reserves.
Since then, commercial lenders have stopped accepting cash deposits in dollars to discourage speculation on the naira, which has fallen as low as N242 against the dollar in the last few weeks.