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Collateral Registry’s loan portfolio hits N12 trillion

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No fewer than 154,827 operators Micro Small and Medium Enterprises (MSMEs), have used their movable assets to obtain loans from financial institutions, under the National Collateral Registry (NCR), estimated at about N1.21 trillion.
 
Out of the number, were 22,251 female-owned MSMEs, even as a number of borrowers secured credit in 2017, with their movable items, a development that has been attributed to the high participation of smallholder farmers under the CBN Anchor Borrower’s Programme (ABP), using cross-guarantee as collateral.
 
Out of the total loan portfolio, N43.62 billion went to female-owned MSMEs.    
 
In pursuant of the mandate of the Central Bank of Nigeria (CBN) on sustainable economic inclusive growth and financial inclusion, the apex bank, in collaboration with the International Finance Corporation (IFC), established the NCR.
 
The NCR is a financial infrastructure that seeks to deepen credit delivery to MSMEs through enhanced acceptability of movable assets (equipment, machinery, vehicles, Keke-NAPEP, crops, livestock, account receivables, inventories, jewelries etc.) as collateral for loans by financial institutions.
 
It is a noticed-based Registry, where security interests in moveable assets are registered after being used as collateral to obtain facilities from financial institutions. It allows lenders to assess their priority interest in potential claims against particular collateral. 
 
According to a report from CBN, there was an upsurge in lending using movable assets as collateral, during the year under review, boosted by increase in the number of microfinance banks on the NCR portal, as well as increased participation of deposit money banks and non-bank financial institutions.
 
A cumulative of 16,349 searches was conducted by both financial institutions and the public on the NCR portal in 2018, due to increased participation in the movable asset lending regime and continuous sensitisation to the users to ensure they conduct searches to determine the level of encumbrances before undertaking any financial transaction.  
 
This year, CBN said it would conduct specialised two to three days Workshop for Judicial Officers on the new secured transactions in movable assets regime in Nigeria, in partnership with the World Bank and National Judicial Institute.
 
There would also be increased sensitisation seminars for the legal community and the police; training of financial institutions on Asset Based Lending; formal launch of the registry; continuous sensitisation and capacity building of financial institutions.
 
It would also drive utilisation of collateral registry by at least 50 per cent of registered banks and other financial institutions; and integration of all other registries with NCR, like the Corporate Affairs Commission, and vehicle licensing, among others.


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