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Can you debit other accounts tied to a BVN not provided by users?
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It is one of the most common questions lenders in Nigeria ask when a borrower defaults: “The customer has money in another bank account, can we recover the loan from there, even if they did not provide those account details?” The short answer is not through Lendsqr directly, and only under specific regulatory conditions. This guide explains why, what the legal framework looks like, and what practical alternatives are available to you right now.
What is a BVN?
A BVN which stands for Bank Verification Number is a unique 11-digit identifier issued by the Central Bank of Nigeria (CBN) to every bank customer. It is linked to all the bank accounts a person holds across any Nigerian bank, making it possible to identify and connect a borrower’s complete banking footprint within the Nigerian financial system.
What is the Global Standing Instruction (GSI)?
The Global Standing Instruction (GSI) is an initiative introduced by the Central Bank of Nigeria that allows licensed financial institutions to recover outstanding loan obligations by automatically debiting funds from any bank account linked to a defaulting borrower’s BVN across all Nigerian banks without needing the borrower to have provided those account details upfront.
Under GSI, if a borrower defaults on a loan, the lender can instruct the system to sweep funds from any of the borrower’s accounts across the Nigerian banking system to recover the outstanding amount. This mechanism was introduced to reduce non-performing loans, strengthen credit discipline, and ensure that borrowers cannot easily default while maintaining multiple funded accounts in the banking system.
You can read the full operational guidelines on the CBN website.
Real-world example
A borrower takes out a ₦500,000 business loan from a licensed microfinance bank. The loan is disbursed to their GTBank account, and a direct debit mandate is set up on the same account. When repayment is due, the GTBank account has a zero balance. The borrower has funds in a separate Access Bank account but has not provided those details to the lender.
Under GSI, the licensed microfinance bank can instruct the system to search for and debit any account linked to the borrower’s BVN across all Nigerian banks. The system finds the Access Bank account, confirms there are sufficient funds, and recovers the outstanding repayment without the borrower having to provide those account details at the time of the loan.
This is the power of GSI. It closes the gap that exists when borrowers deliberately avoid repayment by keeping funds in accounts the lender is not aware of.
Who can use GSI?
Only CBN-licensed financial institutions can implement the GSI framework. This includes commercial banks, microfinance banks, and other institutions formally licensed and approved by the CBN to participate in the GSI scheme.
If your organization does not hold a CBN license, you cannot legally use GSI to debit accounts linked to a borrower’s BVN beyond those they have explicitly provided and consented to. Attempting to do so outside the regulatory framework is a violation of Nigerian financial regulations and data privacy laws.
Does Lendsqr support GSI? Lendsqr does not currently offer GSI as a built-in feature on the admin console. GSI is a regulatory framework administered through the CBN and NIBSS, and its implementation requires formal licensing and integration at the institutional level. If your organisation holds the relevant CBN licence and wants to explore GSI integration, contact support@lendsqr.com to discuss your options.
What can you do instead?
For lenders operating on Lendsqr without a CBN license or while exploring the licensing process, there are effective alternatives for improving loan recovery and reducing defaults.
Direct debit mandates Direct debit is the most powerful recovery tool available to Lendsqr lenders. When a borrower sets up a direct debit mandate on their bank account, you can automatically debit repayments on the due date without requiring any action from the borrower. This significantly reduces missed payments caused by borrower inaction or forgetfulness.
To set up direct debit on your loan product, navigate to Back Office, expand Product Management, select Loan Products, open the relevant product, and choose Direct Debit as the collection method under the Collection Method section. Once configured, all borrowers applying for that product will be required to set up a mandate as part of the application process.
Multiple mandates Instead of linking just one bank account, you can configure your loan product to require borrowers to link multiple bank accounts for direct debit mandate creation. If a repayment attempt on the primary account fails due to insufficient funds, the system can attempt collection from the additional accounts. This significantly increases the chances of successful repayment, particularly for borrowers with variable or multi-source income.
To configure multiple mandates on your loan product, see how to configure multiple mandates creation on your loan product. This is the closest alternative to GSI available to unlicensed lenders while it is limited to accounts the borrower has explicitly consented to, requiring multiple accounts at the point of application maximizes your coverage across their banking activity.
Credit bureau checks and ecosystem data Using Lendsqr’s Oraculi decisioning engine, you can run credit bureau checks and ecosystem data checks on every loan applicant before approval. These checks help identify borrowers with a history of default across the Nigerian financial system, reducing the likelihood of approving high-risk applications in the first place. Prevention is always more effective than recovery.
The Karma blacklist The Lendsqr Karma blacklist flags borrowers who have defaulted or committed fraud across the Lendsqr ecosystem. Running a Karma check as part of your decision model ensures you do not lend to borrowers who have already demonstrated a pattern of non-repayment on other lenders’ platforms.
Should you pursue CBN licensing for GSI access?
If you are scaling your lending operations and managing a growing portfolio, obtaining a CBN license unlocks significantly more powerful recovery tools including GSI. Licensed institutions can recover outstanding loans from any account linked to a borrower’s BVN across the entire Nigerian banking system, removing the dependency on borrowers providing all their account details upfront.
Pursuing licensing is a significant undertaking and involves meeting capital requirements, regulatory compliance standards, and ongoing reporting obligations. However, for lenders serious about scaling, the benefits including GSI access, expanded product offerings, and increased borrower trust can outweigh the investment.
If your organisation is considering this path, begin by reviewing the CBN operational guidelines on GSI and consulting with a financial regulatory adviser familiar with the Nigerian licensing process.
Frequently asked questions
Can Lendsqr debit accounts tied to a borrower’s BVN that they did not provide? No. Lendsqr does not currently support GSI. Lenders on the platform can only debit accounts that borrowers have explicitly consented to through a direct debit mandate setup.
What is the GSI and who can use it? The Global Standing Instruction is a CBN initiative that allows licensed financial institutions to recover loan repayments from any bank account linked to a defaulting borrower’s BVN across all Nigerian banks. Only CBN-licensed institutions can use it.
What is a BVN? A BVN is a unique 11-digit identifier issued by the CBN to every Nigerian bank customer. It links all of a person’s bank accounts across any Nigerian bank under a single identity.
What is the best alternative to GSI for unlicensed lenders on Lendsqr? Direct debit mandates are the most effective alternative. By requiring borrowers to set up a mandate on one or more of their bank accounts during the application process, lenders can automate repayment collection and reduce the risk of default. Configuring multiple mandates maximises coverage across the borrower’s accounts.
Can I require borrowers to link multiple bank accounts on Lendsqr? Yes. The multiple mandates feature allows you to configure your loan product to require borrowers to link more than one bank account. See how to configure multiple mandates creation on your loan product for setup instructions.
Is it legal to debit a borrower’s other accounts without their consent in Nigeria? No. Outside of the GSI framework which is restricted to CBN-licensed institutions, debiting accounts that a borrower has not explicitly consented to is a violation of Nigerian financial regulations and data privacy laws. Always ensure your collection practices are within regulatory boundaries.
