Economy
Emerging Markets and Debt Recovery: What Creditors Should Know
Expanding into emerging markets offers businesses new revenue streams, access to growing consumer bases, and competitive advantages. However, it also presents heightened financial risks, especially when it comes to debt recovery. While these markets provide growth potential, they often come with legal, cultural, and operational complexities that make recovering overdue payments more difficult compared to established economies.
Inconsistent legal frameworks, political instability, fluctuating currencies, and a lack of transparency in credit information are just some of the barriers creditors face. Understanding these risks and developing a tailored approach to credit control is essential for protecting financial interests when operating in regions such as Latin America, Southeast Asia, Africa, and parts of Eastern Europe.
Understanding the Risk Landscape
Emerging markets are attractive because they offer opportunities for businesses to scale quickly. But these markets are also more vulnerable to economic shocks, regulatory changes, and enforcement challenges. Legal systems in many of these countries are underdeveloped or biased toward domestic businesses, making cross-border debt collection a slow and uncertain process.
Creditors must also deal with limited availability of reliable financial data. Many businesses in emerging markets operate with minimal disclosure, making it difficult to assess creditworthiness accurately. Traditional credit reporting agencies may not have sufficient coverage or updated records, forcing creditors to rely on informal references or local partnerships.
Legal Barriers to Enforcement
Enforcing debt collection in emerging markets is complicated by jurisdictional differences. Many countries require foreign creditors to re-litigate their claims locally, even if a judgment has already been secured in the creditor’s home country. Recognition of foreign judgments is not guaranteed unless supported by bilateral or multilateral treaties, which are often lacking or ineffective.
Even when legal action is possible, local courts may be slow, inefficient, or influenced by corruption. Navigating these systems requires specialized knowledge of local laws, court procedures, and enforcement mechanisms.
Currency and Payment Risks
Another critical factor is currency risk. Emerging markets frequently experience currency fluctuations and inflation, making it harder for debtors to pay in stable currencies like the US dollar or Euro. Some governments impose capital controls that limit the ability to transfer funds abroad, trapping foreign creditors in long delays or forcing them to accept payment in devalued local currencies.
To mitigate these risks, creditors often price contracts in stable currencies and include currency adjustment clauses to protect against volatility. However, even well-drafted contracts can be difficult to enforce if local laws favor domestic businesses over foreign suppliers.
Cultural and Commercial Practice Differences
Debt collection strategies that work in developed economies may not be suitable for emerging markets. Business practices in these regions often rely on personal relationships, trust-building, and informal negotiation rather than strict contractual enforcement. Aggressive collection tactics can damage relationships and reputations, making future business difficult.
Successful creditors typically adopt a relationship-based approach, working through local intermediaries or partners who understand the cultural context and can negotiate payment terms effectively without escalating disputes too quickly.
Strategic Risk Management Approaches
Mitigating debt recovery risks starts with preventative measures. Comprehensive due diligence, including background checks, financial reviews, and credit assessments, should be standard practice. Contract terms should be clear, specifying jurisdiction, governing law, payment currency, and dispute resolution methods such as arbitration.
Credit insurance and trade finance solutions can offer additional protection, especially for large or high-risk deals. These financial products help transfer risk away from the creditor and ensure partial recovery even in the event of default.
Monitoring client behavior throughout the relationship is equally important. Early warning signs—such as delayed payments, changing order patterns, or communication breakdowns—should trigger internal reviews and proactive collection efforts before the situation deteriorates further.
Leveraging Local Expertise
Working with local debt collection agencies or law firms is often the most practical way to navigate complex recovery processes in emerging markets. These partners have the local knowledge and networks necessary to apply the right pressure, negotiate settlements, and enforce claims through appropriate legal channels.
While local partners come with added costs, their expertise often increases the likelihood of successful recovery and reduces the risk of missteps that could harm the business relationship or lead to legal complications.
Emerging markets present a compelling opportunity for business growth, but creditors must approach them with caution and a well-defined risk management strategy. Debt recovery in these regions is rarely straightforward, and success depends on understanding local legal systems, currency risks, and cultural practices.
By adopting a proactive approach that combines thorough due diligence, strong contract management, and local expertise, businesses can protect their financial interests while continuing to benefit from the opportunities these markets offer.
For businesses seeking professional support in navigating these challenges, partnering with an experienced international debt collection agency like cisdrs.com can provide the legal and operational expertise needed to recover debts effectively across diverse and complex markets.
By Aduragbemi Omiyale
The series 1 of the N10 billion Commercial Paper (CP) issuance of Legend Internet Plc recorded an oversubscription of 19.7 per cent from investors.
This reaffirmed the strong confidence in the company’s financial stability and growth trajectory.
The exercise is a critical component of Legend Internet’s N10 billion multi-layered financing programme, designed to support its medium- to long-term growth.
Proceeds are expected to be used for broadband infrastructure expansion to deepen nationwide penetration, optimise the organisation’s working capital for operational efficiency, strategic acquisitions that will strengthen its market position and accelerate service innovation.
The telecommunications firm sees the acceptance of the debt instruments as a response to its performance, credit profile, and disciplined operational structure, noting it also reflects continued trust in its ability to execute on its strategic vision for nationwide digital infrastructure expansion.
“The strong investor participation in our Series 1 Commercial Paper issuance is both encouraging and validating. It demonstrates the market’s belief in our financial integrity, operational strength, and long-term vision for digital infrastructure growth. This support fuels our commitment to building a more connected, competitive, and digitally enabled Nigeria.
“This milestone is not just a financing event; it is a strategic enabler of our expansion plans, working capital needs, and future acquisitions. We extend our sincere appreciation to our investors, advisers, and market partners whose confidence continues to propel Legend Internet forward,” the chief executive of Legend Internet, Ms Aisha Abdulaziz, commented.
Also commenting, the Chief Financial Officer of Legend Internet, Mr Chris Pitan, said, “This achievement is powered by our disciplined financing framework, which enables us to scale sustainably, innovate continuously, and consistently meet the evolving needs of our customers.
“We remain committed to building a future where every connection drives opportunity, productivity, and growth for communities across Nigeria.”
By Adedapo Adesanya
President Bola Tinubu will, on Friday, present the 2026 Appropriation Bill to a joint session of the National Assembly.
The presentation, scheduled for 2:00 pm, was conveyed in a notice issued on Wednesday by the Office of the Clerk to the National Assembly.
According to the notice, all accredited persons are required to be at their duty posts by 11:00 am on the day of the presentation, as access into the National Assembly Complex will be restricted thereafter for security reasons.
The notice, signed by the Secretary, Human Resources and Staff Development, Mr Essien Eyo Essien, on behalf of the Clerk to the National Assembly, urged all concerned to ensure strict compliance with the arrangements ahead of the President’s budget presentation.
The 2026 budget is projected at N54.4 trillion, according to the approved 2026–2028 Medium-Term Expenditure Framework (MTEF) and Fiscal Strategy Paper (FSP).
Meanwhile, President Tinubu has asked the National Assembly to repeal and re-enact the 2024 appropriation act in separate letters to the Senate and the House of Representatives on Wednesday and read during plenary by the presiding officers.
The bill was titled Appropriation (Repeal and Re-enactment Bill 2) 2024, involving a total proposed expenditure of N43.56 trillion.
In a letter dated December 16, 2025, the President said the bill seeks authorisation for the issuance of a total sum of N43.56 trillion from the Consolidated Revenue Fund of the Federation for the year ending December 31, 2025.
A breakdown of the proposed expenditure shows N1.74 trillion for statutory transfers, N8.27 trillion for debt service, N11.27 trillion for recurrent (non-debt) expenditure, and N22.28 trillion for capital expenditure and development fund contributions.
The President said the proposed legislation is aimed at ending the practice of running multiple budgets concurrently, while ensuring reasonable – indeed unprecedentedly high – capital performance rates on the 2024 and 2025 capital budgets.
He explained that the bill also provides a transparent and constitutionally grounded framework for consolidating and appropriating critical and time-sensitive expenditures undertaken in response to emergency situations, national security concerns, and other urgent needs.
President Tinubu added that the bill strengthens fiscal discipline and accountability by mandating that funds be released strictly for purposes approved by the National Assembly, restricting virement without prior legislative approval, and setting conditions for corrigenda in cases of genuine implementation errors.
The bill, which passed first and second reading in the House of Representatives, has been referred to the Committee on Appropriations for further legislative action.
By Adedapo Adesanya
The federal government has imposed an immediate nationwide ban on the export of wood and allied products, revoking all previously issued licenses and permits to exporters.
The announcement was made on Wednesday by the Minister of Environment, Mr Balarabe Lawal, during the 18th meeting of the National Council on Environment in Katsina State.
Mr Lawal said the directive, outlined in the Presidential Executive Order titled Presidential Executive Order on the Prohibition of Exportation of Wood and Allied Products, 2025, became necessary to curb illegal logging and deforestation across the country.
“Nigeria’s forests are central to environmental sustainability, providing clean air and water, supporting livelihoods, conserving biodiversity, and mitigating the effects of climate change,” the Minister said, warning that the continued exportation of wood threatens these benefits and the long-term health of the environment.
The order, published in the Extraordinary Federal Republic of Nigeria Official Gazette No. 180, Vol. 112 of 16 October 2025, relies on Sections 17(2) and 20 of the 1999 Constitution (as amended), which empower the state to protect the environment, forests, and wildlife and prevent the exploitation of natural resources for private gain.
Under the new policy, security agencies and relevant ministries are expected to enforce a total clampdown on illegal logging activities nationwide.
On his part, the Katsina State Deputy Governor, Mr Faruk Lawal Jobe highlighted the state’s history of pioneering socio-economic policies that have influenced national policy. He emphasized the importance of collaboration in addressing environmental challenges across the country.
“Environmental sustainability is critical to achieving growth and improving the quality of life of our people,” he said. “Our administration has prioritised initiatives aimed at combating desertification and promoting afforestation.”
The ban reflects the government’s commitment to safeguarding Nigeria’s shrinking forest cover and addressing climate change, while ensuring sustainable use of natural resources for future generations.
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