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BRIPAN 2.0 - The Case For A New Thinking For The Insolvency Market

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Wednesday, May 10, 2017  1.51PM / By Olufemi AWOYEMI 

Being a presentation delivered at the BRIPAN members evening held on April 27, 2017 at Victoria island, Lagos.   

The Case for Change 

As Anthony I Idigbe (Punuka Attorneys & Solicitors) expertly put it in his November 15 2013 article published on the ILO websites;  

“As at 2008, here was the situation as observed in a World Bank report (October 2007) on the observance of standards and codes principles and guidelines for effective insolvency and creditor rights systems:
….weaknesses in Nigerian insolvency law:
1.   a lack of efficient means by which debtors can rearrange their affairs and preserve a potentially viable entity;

2.    from creditors' point of view, no credible legal threat to recalcitrant debtors;

3.   no provisions for insolvency practitioners to be qualified, regulated, licensed or bonded; and

4.  a substantially under-resourced court system, which is susceptible to corruption and substantial delay. 

In 2011 the Business Recovery and Insolvency Practitioners Association of Nigeria (BRIPAN) decided to pursue a legislative reform agenda to improve Nigerian insolvency law.”  

BRIPAN remains the premier private sector-driven association of insolvency practitioners comprised of lawyers, accountants and bankers. Its objective is to develop a body of knowledge in business recovery and insolvency in Nigeria, and ensure that its members retain such knowledge and conduct their insolvency and business recovery work professionally. BRIPAN was firmly of the view that Nigerian insolvency law was due for review to bring it into line with international best practice.

Fast track to 2017 and what has changed?  

Given the changes in the market and practice dynamics, we must now ADD to the 4 points above, the following: 

1.       No credible database of businesses going extinct or facing insolvency challenges in the country currently;

2.      A changed market place with new features such as: 

1)            Increasing non-performing loans as a result of credit risk practices and standards that does not capture or offer asset quality protections;

2)           A fast developing credit and bond market (new instruments);

3)           Changes in compliance & best practices;

4)           A much needed role for Credit Registry’s;

5)           A rise in unsecured creditors and a lack of lender consensus;

6)           Increased emphasis on asset tracking/tracing and recovery;

7)           Technological advancements around Fintech/Blockchain;

8)          An expanding Micro-credit market with unique features;

9)           Taxation as a major source of business risk;

10)       Increasing incidence of technical insolvency of sub-nationals and the absence of options for sovereign recovery; and

11)        Public sector MDA restructuring and growing debt profiles with consequential implications for contractors/businesses. 

3.      A continuing absence of personal bankruptcy framework and protections under the law; 

4.      A plethora of practitioners engaged in an expanded definition of business recovery, debt collection and insolvency. (i.e. lawyers, accountants, stockbrokers, bankers, credit managers, tax managers, credit bureaus, risk managers and regulators). 

The plan at BRIPAN to assist governments and individual companies to revive their businesses through advisory, training, and professional insolvency services remains on the agenda. It however needs to be more integrated by working with and through other associations and bodies to redefine and harmonize practice.

But how does BRIPAN hope to achieve this?  

Simply by ensuring that BRIPAN, an Association of Business Recovery Professionals becomes the leading organisation for insolvency, restructuring and turnaround specialists in Nigeria. 

It is about time to delineate BRIPAN into Practice Lines:

  •          Legislation and Consultation
  •          Technical & Research Resources (Library/Centre for Insolvency)
  •          Advocacy & Communications / Stakeholder Engagements
  •          Membership & Practice Development / Directory
  •          Technology & Innovation
  •          Partnerships & Collaborations
  •          Public Advisory & Volunteer Services
  •          Events & Programs 

A BRIPAN 2.0 must be active in raising awareness with individuals and businesses on the key benefits in obtaining financial advice and being aware of rights, protections and options through its guidance on policy and insolvency issues, and technical information outputs. 

The association must be able to provide comprehensive information and signaling effect through its focus on lobbying for legislative changes and benchmarking of professionals who are able to advise and work with underperforming and financially distressed state governments, businesses and individuals. 

Needless to say, it must become the foremost industry provider of education, training (even as a pull factor) and social networking opportunities for members and professionals across the country. 

A BRIPAN event must be the “forum” for debate on key issues facing the profession and update(s) on lobbying and work with government, key policy makers, opinion formers and the media. 

At a minimum, it must embrace technology and develop a website/app that makes this accessible to all in order to establish relevance, value and integration with new means of delivering recovery and insolvency practices. 

More importantly, it must continue to ensure a high quality of membership that will support its drive to impact on the many legislation before the national assembly and the ‘ease of doing business’ coordinating team which includes bills related to the Credit Registry and review of the bankruptcy provisions in our common laws. 

Thank you.  

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