Collateral Registry will boost production, create jobs – CBN, IFC

The Central Bank of Nigeria (CBN) has said the National Collateral Registry, which it recently developed with the support of International Finance Corporation (IFC), a member of the World Bank Group, to allow low-income earners and small-scale entrepreneurs to secure loans against movable assets, will not only increase local production but will help in reducing unemployment.

Speaking at the Kaduna Interactive Forum on the National Collateral Registry and Credit Reporting System, the Registrar, of the National Collateral Registry (NCR), Mr Mainasara Muhammad said the Collateral Registry will help bridge the MSME finance gap that has been estimated to be about 62 billion dollars.

In his words: “There are about  37 million micro, small, and medium-size enterprises (MSMEs), many of whom are struggling to gain access to the capital they need to grow because of they lack collateral such as land and buildings that bank usually request for. This collateral gap between the bank and MSMEs has led to a finance gap of about 62 billion dollars.”

“Knowing that these MSMEs contribute significantly to economic growth and job creation in Nigeria, as such, the National Collateral Registry will help bridge the MSMEs finance gap by facilitating easier access to funding which will ultimately boost production and lead to creation of employment”.

Eme Essien Lore, IFC Country Manager for Nigeria, said “the online registry coupled with the credit reporting system has been implemented in other countries like Ghana and Liberia with success recorded”.

According to Eme, “Nigeria is the largest economy in Sub-Saharan Africa and a focus country for the Universal Financial Access by 2020 initiative. This is why we are supporting the Central Bank Nigeria and other stakeholders in initiating the Collateral Registry as well as strengthening the Credit Reporting System. It has previously been implemented in other countries with amazing outcomes. For instance in Ghana, the collateral registry has facilitated $1.3 billion in financing for the small-scale business sector since it was established in 2010, and $12 billion in total financing for the business sector using movable assets as collateral. We are very excited that a registry is now also in place in Nigeria,”

The National Collateral Registry is supported with the strengthened Credit Reporting System to promote secured transaction and responsible lending framework in Nigeria. These two financial infrastructures are expected to enable businesses to leverage their assets to obtain credit for growth, improve assets liquidity, especially short-term assets, and allow asset diversification as well as reduce cost and promote prudent lending.

About the National Collateral Registry (NCR)

The National Collateral Registry of Nigeria is an initiative of the Central Bank of Nigeria (with support from IFC) to improve access to finance particularly for Micro, Small and Medium Enterprises (MSMEs). The Collateral Registry, which operationalizes Part III of the Central Bank of Nigeria’s Regulations on Registration of Security Interests in Movable Property by Banks and other Financial Institutions (Regulations No, 1, 2015) is a web-based system that allows lenders to determine any prior security interests, as well as to register their security interests over movable assets provided as collateral. The Collateral Registry facilitates the use of movable / personal assets as collateral that remain in possession or control of the borrowers and thereby improves access to secured finance.

About Credit Bureau Association of Nigeria (CBAN)

Credit Bureau Association of Nigeria (CBAN) is a Business Management Organization formed to promote the use of credit information in Nigeria, improve access to finance for businesses, and aid the success of members through advocacy and capacity building. It was set up by the three licensed credit bureaus in Nigeria – XDS Credit Bureau Limited, CRC Credit Bureau Limited and CR Services Credit Bureau Plc.

Picture caption:

L-R​:​ Onome Ako, The Executive Secretary Credit Bureau Association of Nigeria​ (CBAN); Mainasara Muhammad​,​ Registrar National Collateral Registry​, CBN; Ubong Awah, ​Nigeria Infrastructure Project Manager, IFC/World Bank​;​ and ​Offiong Ekpeyong​, Administrator, National Collateral Registry, CBN​ during​ one-day ​capacity building for​ MSMEs and financial institutions  on ​the Credit Reporting System and National Collateral Registry held in Kaduna on Wednesday, August 31, 2016​.