Weak Insolvency Laws Threaten Businesses as BRIPAN, Polaris Bank Push Reform

Nigeria’s fragile business environment continues to suffer from weak insolvency frameworks, leaving companies, especially small and medium-sized enterprises (SMEs), vulnerable to collapse, unpaid wages, and worsening economic instability.

The Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) has now partnered with Polaris Bank in a bid to address the gaps that have long undermined business survival and investor confidence.

BRIPAN president, Mr Chimezie Victor Ihekweazu, warned during a courtesy visit to Polaris Bank’s managing director and CEO, Mr Kayode Lawal, in Lagos that the lack of effective recovery structures has contributed to repeated business failures, eroding economic stability.

“Since its establishment in 1991, BRIPAN has promoted standard practices in insolvency and business recovery to prevent widespread corporate collapse and the risks it creates—such as unpaid salaries that destabilise households and local economies,” Ihekweazu said. He stressed that without urgent reforms, Nigeria could see more enterprises fold under pressure from debt, poor management, and limited access to recovery support.

With over 2,000 trained professionals across Nigeria’s six geopolitical zones, BRIPAN is pushing to close regulatory loopholes and build frameworks that reduce insolvency-related shocks. Ihekweazu noted that financial institutions like Polaris Bank are critical to ensuring that reforms go beyond paper to practical implementation.

Polaris Bank CEO, Mr Lawal, admitted that insolvency mismanagement has already weakened many businesses and cautioned that any reform effort must be built on a strong legal foundation to be credible. “Partnerships like this must go beyond dialogue. Without legal backing and serious implementation, insolvency frameworks will remain ineffective, and businesses will keep failing,” Lawal said.

Analysts say that unless Nigeria strengthens its insolvency laws, the economy risks higher unemployment, declining investor confidence, and the collapse of more SMEs — a sector that contributes significantly to GDP and job creation.