The collateral registry is an electronic public database that contains information on security interests in movable property and it is aimed at improving ease of loan applications
According to various media reports, Nigerians will soon be able to take bank loans using their reputation, generators, deep freezers, school certificates, farm produce, and many other unconventional properties.
The Cable reports that the Central Bank of Nigeria (CBN), in partnership with the International Finance Corporation (IFC), a member of the World Bank Group, will be launching a Nigerian Collateral Register (NCR) in the first quarter of 2016.
The collateral registry is an electronic public database that contains information on security interests in movable property and it is aimed at improving ease of loan applications for small and medium scale enterprises (MSMEs) in the country.
According to Mainasara Muhammad, CBN assistant director on the collateral registry project, Nigerians will be able to use moveable assets such as cars, generators, deep freezers and farm produce as collateral for loans after the registry is launched in February or March.
“We want to take banking to the rural doorstep, whereby a bean cake seller can walk into the bank and say manager, tomorrow is Friday, I don’t have any money, I need N5,000 to buy beans, I want to fry bean cake tomorrow on our market day, and he’d give her the loan not based on collateral,” he said. “You can go to the banks and say I have this, and I need a loan. The practice we have in most microfinance banks is that they would take your car and give you a loan and park it in their premises. No. Now, they’d take your car, register it and give it back to you, but note that someone already has an interest on that car.”
Mainasara also added that the Bank of Industry had already begun giving loans with tertiary institution and NYSC certificates as collateral.
Ubong Awah, project manager of the collateral registry, stated that it has worked in Ghana, Malawi, and Ebola-ridden Liberia, providing about N45 billion worth of loans for Liberian MSMEs with a year.