Managing Director/Chief Executive Officer, Asset Management Corporation of Nigeria (AMCON), Mr. Ahmed Lawan Kuru (left), explaining a point to Honourable Justice Zainab Adamu Bulkachuwa, CFR, President of the Court of Appeal (right) and the Chairman, Board of Directors, AMCON, Dr. Muiz Banire, when AMCON management paid a courtesy visit to Justice Bulkachuwa at her office in Abuja…. recently

The Asset Management Company of Nigeria (AMCON) and its debt recovery partners (AMPs) are in a bind as the debt recovery process has so far proven to be long and arduous. Major challenges facing the recovery process relate to the antics of local lawyers to frustrate the smooth and speedy determination of cases by introducing technicalities that slow done the judicial process.
In addition, the difficulties in taking over assets of debtors even after cases have been determined by courts of competent jurisdiction has created a situation where over N5trn (or 63% of the federal government’s 2019 budget) is tied up in bad commercial loans sitting in AMCON’s financial records.
AMCON was established on 19th July, 2010 by the AMCON act, it was designed to provide stability for the Nigerian financial system, by resolving the worsening cases of non-performing loans of banks.
Nevertheless, this has not been without major problems as AMPs have found themselves hampered by a myriad of challenges scuttling effectiveness of the debt recovery process and making AMCONs previous sunset date for institutional wind up of 2020 even more unlikely. A critical problem for AMPs is funding. Many AMPs have found themselves using their own financial resources to investigate and identify debtors properties and pursue court orders to get these properties attached to legal proceedings against the debtors.
In situations where AMPs have become cash-strapped the recovery process has become stuck by the lack of liquidity of the recovery agents allowing debtors slip through the hitherto firm fingers of the recovery partners.
On October 24, 2018 Proshare published a report from AMCON culled from “The Cable” of the top 105 erring debtors that refused to reach settlement with the corporation.
With over 12,000 loans of various sizes to be recovered, the AMPs currently handle over 6,000 with the attendant rigours of ensuring a strategic approach to the debt recovery process.
AMPs are Asset Management Partners who are engaged by the provisions of the AMCON Act, to provide debt recovery and management service as defined within the scope of the law.
Additional responsibilities for the AMPs as stipulated by the AMCON Act, include;
• It shall be the responsibility of the Service Provider to contact the Debtors in respect of the Eligible Bank Assets (“EBAs”) and provide a feedback within one month of the date of the engagement, and subsequently provide periodic reports as directed by AMCON
• The Service Provider shall take necessary steps to locate Debtors, trace assets of Debtors, negotiate with the Debtors and reach settlement with the Debtors in line with the Guidelines to the Engagement; all settlements reached with the Debtors shall be presented for AMCON’s approval within 14 (fourteen) days.
From some of the accounts of over 10 foreclosure suits assigned to various AMPs since 2016, most of the cases are now in court, while there has been progress in tracing the properties of the respective debtors.
Also, some of the loans of the Obligors have been restructured and negotiations made through the AMPs to AMCON, which has seen some of the debts cleared and recovery achieved.
Further Proshare engagement with an AMP who had been assigned a number of AMCON debt cases since 2016 , presented a number of issues around the debt resolution process for legacy loans of banks.
Source Proshare

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