Osinbajo signs two bills to ease access to credit for Nigerians
‘Executive orders aim to bring firms back to Nigeria’
Acting President Yemi Osinbajo has signed into law, two bills passed by the National Assembly to facilitate access to affordable credit for Nigerians.
The bills, which have now become ‘Acts’ are the Secured Transactions in Movable Assets Act, 2017 (otherwise known as Collateral Registry Act) and the Credit Reporting Act, 2017.
‘The Collateral Registry Act’ ensures that Micro, Small and Medium Enterprises (MSMEs) in Nigeria can register their movable assets such as motor vehicles, equipment and accounts receivable in the National Collateral Registry, and use same as collateral for accessing loans.
A statement signed by the Senior Special Assistant on Media and Publicity, Laolu Akande, yesterday said this in turn will increase their chances at accessing financing and tackle one of the major obstacles faced by MSMEs.
Access to credit is critical to economic growth and is considered to be the motor for driving private sector development. However, in Nigeria more than 70 per cent of private enterprises, typically MSMEs, have limited or no access to credit. Credit applications get rejected due to insufficient credit history and information for the lender to use to make a reasonable judgement, as well as unacceptable collateral.
The two new Acts remove those obstacles for MSMEs.
The Collateral Registry Bill, 2017, will give confidence to lenders to utilise the Registry and thereby make credit available to MSMEs and individuals through the use of their movable assets as collateral.
The Credit Reporting Act now enables lenders to make reasonable judgement on whether or not to extend credit to an individual, and reduces the cases of bad loans.
Meanwhile, the Federal Government yesterday declared that the three Executive Orders recently signed by Osinbajo on the ease of doing business in the country are aimed at bringing back firms that have relocated to other countries.
The government also expressed commitment to move up the World Bank’s Ease of Doing Business index 20 places in the first year and be among the top 100 within the next three years.
Specifically, the 2016 Ease of Doing Business report by the World Bank indicates that Nigeria is currently ranked 169 out of 189 countries.
The Head of Service of the Federation, Winifred Oyo-Ita, spoke yesterday at a workshop organised for federal agencies, parastatals, corporations and companies on the operationalisation of the executive order on promotion of transparency and efficiency in the business environment, held at the Conference Centre, Abuja.
Acting Secretary to the Government of the Federation, Habiba Lawal, said the Executive Order is one of the measures employed by the current administration to achieve a more judicious management of Nigeria’s resources and improved business environment.
She urged MDAs to demonstrate commitment and support for the declared policy directives of government to facilitate the successful implementation thereof, for the good of the nation.
The Minister of Industry, Trade and Investment and Vice Chair of Presidential Enabling Business environment Council (PEBEC), Dr. Okechukwu Enelamah, said government was already getting testimonies that the reforms were working.