This week, loan defaulters will face legal action as the Judicial Service opens small claim debt recovery courts to address outstanding debts owed to financial institutions. This initiative aims to alleviate the burden on the courts and streamline the judicial process through a shift system.
Chief Justice Gertrude Torkornoo announced this development during a meeting with the Judicial Press Corps. She said that since the introduction of the Court Shift System earlier this year, Quick Credit Loans alone has filed 30,000 cases, with plans to file nearly 55,000 debt-related cases.
The Chief Justice explained that the new court will operate on Saturdays and during afternoon sessions to expedite the backlog of debt-related cases. This approach is designed to ease the pressure on judges, particularly in district courts, and ensure timely justice.
The Small Claim Debt Recovery courts will be piloted in the Ashanti and Greater Accra Regions.
Many financial institutions face challenges in recovering debts from customers, leading some to adopt unconventional methods such as publicly confronting debtors, which has damaged their reputations and deterred potential clients.
The establishment of the Small Claim Debt Recovery courts is expected to reduce high default rates, potentially improving the Non-Performing Loan (NPL) ratio of banks, which has risen to 24.1% in June 2024, up from 18.7% in June 2023.
