LAGOS, April 24 (Reuters) - Nigeria's central bank ordered banks on Friday to crack down on borrowers with non-performing loans (NPLs) in a move aimed at avoiding a repeat of a 2009 industry bailout that cost the government $4 billion. A sharp drop in the global price of oil, Nigeria's main export, has triggered a currency crisis in Africa's largest economy and strained government's finances, while also harming the cash flow of some companies with foreign currency loans.
Ratings agency Fitch said in February it expects NPLs for Nigerian lenders to rise above a central bank cap equal to five percent of their total loan portfolio but to remain below 10 percent this year, driven by high credit concentration in oil and gas and power sectors. Under the new plan, banks will give bad debtors three months to square up their accounts. Failure to do will result in them being named and shamed in Nigerian media and being barred from currency and government debt markets. "The Central Bank of Nigeria has observed the rising trend of non-performing loans in the industry," Tokunbo Martins, director of banking supervision, said in a statement.
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