AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
A Nigerian lender can only take and sell collateral in the way the security document and the law allow: usually a written demand and notice of default first, then either seizure and sale of a pledged movable asset such as a car, or, for land, exercise of a power of sale under a mortgage, often through a receiver or with a court order. After the sale, the lender may keep what covers the debt and its proper costs, and any surplus belongs to the borrower.
Collateral makes a loan cheaper and easier to get, but it raises the stakes of a default. Knowing the steps a lender must follow tells you how much time you have, what you can challenge and what you are owed if the asset is sold for more than the debt.
Movable assets: cars, equipment and stock
Security over movable assets, such as vehicles, machinery, equipment and stock, is registered on the National Collateral Registry, a CBN-run register set up for the Secured Transactions in Movable Assets Act 2017. A registration tells other lenders that the asset is already claimed. Our explainer on the National Collateral Registry shows how a search works.
Typical steps
- Default. You miss payments as defined in the security agreement.
- Demand and notice. The lender sends a written demand and a notice that it intends to enforce its security.
- Taking possession. Depending on the agreement and the law, the lender may take the asset peacefully or apply to court for an order. It cannot use force, threats or the police to seize it.
- Notice of sale. The borrower should be told of the intended sale, giving a last chance to pay.
- Sale. The asset is sold, and the proceeds go first to the costs of enforcement, then to the debt.
- Account and surplus. The lender should give an account of the sale and pay any surplus to the borrower or the next secured creditor.
Land and buildings
Land is usually charged by a mortgage, often a deed of legal mortgage, and enforcement is slower and more formal than for a car.
- Demand. The lender demands repayment in line with the mortgage deed.
- Power of sale. A legal mortgage usually gives the lender a power to sell once the debt is due and notice has been given. Lenders often apply to court or appoint a receiver to manage or sell the property.
- Valuation and sale. The property should be sold for a proper price, usually after valuation, and not at an undervalue to a friendly buyer.
- Possession. Removing occupants from a home generally needs a court order.
- Redemption. Until the sale is completed, the borrower can usually stop it by paying what is due.
Your right to the surplus
Collateral secures a debt; it does not hand the asset to the lender outright. After a sale, the lender may keep what covers the debt, lawful interest and the proper costs of enforcement. Anything left belongs to the borrower. If the sale raises less than the debt, the borrower usually remains liable for the shortfall.
Worked example (illustrative figures)
| Item | Amount |
|---|---|
| Sale price of pledged car | ₦4,000,000 |
| Outstanding loan, interest and charges | ₦3,100,000 |
| Enforcement costs (towing, storage, auction) | ₦250,000 |
| Total deducted by lender | ₦3,350,000 |
| Surplus due to borrower | ₦650,000 |
Ask for this account in writing: the sale price, the buyer's identity if the documents allow, each cost, and the debt figure used. Challenge any cost that looks inflated.
Guarantors and third-party collateral
Sometimes the collateral belongs to someone else, such as a relative who pledged land title for your business loan. That person is in a position close to a guarantor: their asset can be sold, but their liability is usually limited to that asset unless they also signed a personal guarantee. If you pledged an asset for someone else's loan, ask the lender for the borrower's statement and keep in touch with the borrower, because you may be able to pay off the debt and take over the lender's rights against the borrower. See what a guarantor must pay.
What a lender cannot do
- Seize an asset that is not covered by the security agreement.
- Use violence, threats or police officers to recover a civil debt. See whether you can go to jail over a loan.
- Sell without the notice the agreement and law require.
- Keep the surplus.
- For digital lenders, act contrary to the agreement or rely on unfair terms (FCCPC 2025 regulations, Regulation 18).
Steps if repossession is threatened
- Get your security agreement or mortgage deed and read the default and enforcement clauses.
- Ask for a full statement of the debt.
- Offer a written repayment plan; many lenders prefer instalments to a slow sale. See the repayment proposal template.
- Cut other spending to fund the plan; how to get out of debt sets out a budget-first approach.
- Consider selling the asset yourself, with the lender's consent, to get a better price than an auction.
- If a sale goes ahead, ask for the account and claim any surplus in writing.
Where Pryme fits
Loans on Spaces, lent by Solid Allianze Microfinance Bank, are spent with merchants in Spaces, and the agreement is shown in full before you accept. See credit.
Questions people ask
Can a bank seize my car without going to court?
It depends on the security agreement and the law that applies. A lender cannot use force or the police. If you are unsure whether a seizure is lawful, get legal advice quickly.
What happens to the extra money after my collateral is sold?
The lender keeps what covers the debt and proper costs. Any surplus belongs to you, so ask for a written account of the sale.
Can I stop a bank from selling my house?
Usually you can stop a sale by paying what is due before it is completed. A court may also intervene if the lender has not followed the mortgage terms.
Do I still owe money if the collateral sells for less than the loan?
Usually yes. The shortfall remains a debt the lender can claim.
Sources
- FCCPC: Digital, Electronic, Online, or Non-Traditional Consumer Lending Regulations, 2025 (made 21 July 2025) · accessed Oct 2026
- CBN: Financial institutions under CBN supervision · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.