CBN to lift businesses with movable collaterals

The Central Bank of Nigeria has declared that credit lenders will soon be accepting movables items as collateral to issue out loans.

The apex bank made this known today through its Product Development Manager, Dr. Musa Olasubo at the Southwest Zonal programme of the Micro, Small, and Medium Enterprises (MSME) held in Lagos today.

At the event hosted by Growth and Employment in States (GEMS3), Dr. Musa said that  the MSME sector which accounts for 90 million jobs in the country has been crippled due to non-availability of fund.

Noting that a bill which will allow borrowers to present movable items as collateral is in the process of ratification, he said that the platform will mark a paradigm shift in the business of money lending in the country.

‘The two major challenges of MSMEs in the country is access to finance and infrastructure. The CBN also observed that the absence of Credit Registry in Nigeria is the missing link needed to connect the MSME sector to financial sources. To fill this gap, a bill has been gazetted and sent to the national assembly for the establishment of a National Collateral Registry,’ he said.

Speaking on the composition and structure of the proposed National Collateral Registry, he stated that the Central Bank was encouraged by the success of collateral registries for movable assets in other countries.

‘The registry software has been developed, customized and server-installed. It is going to be an information platform for lenders and borrowers of money.  We have installed a public data base of ownership of assets which is going to allow borrowers prove their credit worthiness and at the same time allow potential lenders access their ranking priority in potential; claims against particular collateral.

‘The registry will have the financial information of lenders and borrowers of fund. We will also design a unique identification for everyone by the use of BVN. The collateral registry will be the single central and electronically driven database where all movable assets to be pledged as are registered in order to avoid the re-pledging of the same encumbered assets which have existing liens’ he explained.

While urging the legislature to pass the bill into law in due time, he observed that the registry will make asset diversification possible, provide leverage for movables as collaterals and provide banks with profitable lending opportunities.