- CIBN Advises Stakeholders on Collateral Registry Act
The Chartered Institute of Bankers of Nigeria has advised operators in financial services and allied sectors to remain ethical and professional in the use of the provisions of the National Collateral Registry Act.
The Act is meant to remove bottlenecks associated with the ease of doing business, promote financial inclusion and enhance credit access for the Micro and Small-scale Enterprises in the country.
The President/Chairman of Council, CIBN, Prof. Segun Ajibola, who spoke during a breakfast session organised by the CIBN Centre for Financial Studies in Lagos, said the Act was meant to promote business and economic growth.
The theme of the event was, “The Collateral Registry Act: Pros and cons for the banking industry and other stakeholders.”
Ajibola said, “It is then saying the obvious that the banking industry is central to the effective functioning of the MSMEs. The small operating scale of most MSMEs does not afford them the opportunity to meet most of the collateral requirements, particularly fixed assets such as real estate, for accessing loans in commercial banks.”
“For these reasons, the enactment of Collateral Registry Act which allows the SMEs in Nigeria to apply for credit on the strength of movable assets as collateral is truly a welcome innovation. By introducing this Act, Nigeria is joining the league of countries like India, where the initiation of the SME Act in 2006 led to the consistent growth of SME practice.”
According to him, the practice of collateral registry has led to exponential growth of the MSMEs sector in China.
The Registrar, National Collateral Registry (Central Bank of Nigeria), Mainasara Muhammad, disclosed that since its inception, the total number of financial statement registered by 21 financial institutions was 17,631, and valued at N397bn.
He said the collaboration between the CBN and the World Bank led to the establishment of the NCR, which according to him, is meant to bridge the huge financing gap in the SMEs space and deepen financial inclusion.
