LAPO Microfinance Bank has commenced a review of recent work arrangements linked to its loan recovery activities following concerns raised over their implementation and possible implications for employee welfare.
In a statement, the bank acknowledged the concerns and said it was examining the matters raised, including how the recovery arrangements were implemented, to ensure compliance with its established policies and applicable requirements.
The development comes amid intensified efforts by financial institutions to strengthen loan recovery and maintain healthy portfolios as economic pressures continue to affect borrowers’ repayment capacity.
LAPO explained that the measures were introduced as operational interventions in response to its portfolio recovery priorities and the need to maintain sound portfolio quality.
However, the microfinance bank stressed that the pursuit of improved loan recovery must be balanced with responsible operational practices and adequate consideration for employees.
“The Bank takes the welfare and wellbeing of its employees seriously and is reviewing the matters raised,” it said.
According to the bank, its operational requirements must be implemented responsibly and in line with the standards guiding its activities.
The review is expected to determine whether aspects of the recent arrangements require adjustment or corrective action.
LAPO also reaffirmed its commitment to constructive engagement with employees and other relevant stakeholders, saying it would address any issues requiring attention after completing its review.
The bank’s response comes at a time when rising credit risks and pressure on asset quality have made effective loan recovery an increasingly important priority for financial institutions.
While recovery of delinquent loans remains critical to protecting depositors’ funds and sustaining the viability of lending institutions, the controversy underscores the importance of ensuring that recovery strategies do not compromise employee welfare or institutional standards.
LAPO said it remains committed to maintaining sound portfolio quality while ensuring that operational decisions are carried out with due regard for the wellbeing of its workforce and applicable requirements.
