The Concept of Security as a Panacea in the Hands of the Creditor – A Myth or Reality?

Abstract

The concept of Security with reference to the Nigerian Financial sector and Individuals was discussed broadly in this paper. Security is clearly defined, the usefulness of security is well elaborated in this paper. This paper also gives us an insight into the nature of security, it classifies security into real and personal security. Before any loan agreement can become valid, certain conditions must be addressed and fulfilled such as Recognition of parties by law, Capacity of parties under the law, Validity of agreement, Reliability of Security tendered, Issue of acquisition, Compliance with Relevant Planning Regulations, Valuation. The last three instances are relevant where Land is the subject matter of the Security.

This paper emphasizes without doubt, that the major problem with Security as a panacea in the hands of the creditor lies with its enforcement, and goes on to suggest that this problem of unenforceability of security can be drastically reduced if the Relevant Law Enforcement Agencies in every country, especially in Nigeria begin to take Creditors’ Petitions against Debtors seriously and work on them. Once petitions have been investigated to be genuine, the Law Enforcement Agencies should go after the debtors and effect their arrests, especially escapee debtors who have made away with several peoples’ monies and those who are owing the banks massive amounts of money. After they have been arrested, if they cannot pay back the money, they should be sentenced to at least twenty one years imprisonment because they may have wrecked some of their Creditors completely and rendered them totally hopeless. We can see from this abstract that Security as used in the context of this paper is both a Myth and a Reality because it has worked well for some creditors, but some other Creditors could not be allowed to take over it to realize the money they loaned to debtors.

KEYWORDS : Security, Creditor, Debtor, Banks, Secured Creditor, Unsecured Creditor, Mortgage, Real Security, Surety, Personal Security, Parties, Loan Agreement, Contract, Indemnity, I.O Smith Guarantee, Law Enforcement Agencies, The EFCC, Valid Title, Mortgagor, Land, Escapee Debtors.