Nigeria: Moveable Assets Collateral - Banks Make N1.2trn Profit
Financial institutions including deposit money banks, merchant banks, development finance institutions and microfinance banks that have been registered on the Registry's portal recorded at least N1.23 trillion as profit from implementation of the Central Bank of Nigeria (CBN)-initiated National Collateral Registry of Nigeria.
According to CBN Governor Godwin Emefiele, lending banks operating in Nigeria have registered interest on movable assets worth N1.23 trillion, $1.14 billion and €6.08 million through 41,408 financing statements. "This underscores the potential of movable assets as collateral to enhance access to credit and, hence, our resolve to drive its effective implementation," Emefiele said yesterday at a workshop for judges on Secured Transaction in Movable Assets (STMA), with the theme: "Leveraging on Moveable Assets for Credit Delivery in Nigeria: Legal and Regulatory Framework."
He noted that by January 31, 628 financial institutions, comprising 21 deposit money banks, four merchant banks, one non-interest bank, four development finance institutions, 551 microfinance banks, 13 non-bank financial institutions, and 34 finance companies had been registered on the Registry's portal. Leadership gathered that the workshop was aimed at sensitising judicial officers in the enforcement of the provisions of the STMA Act with a focus on improving access to finance, particularly for Micro, Small and Medium Enterprises (MSMEs).
Emefiele said Nigeria's quest for inclusive economic growth and development would be futile if it fails to adequately ease access to finance by the MSMEs which, he noted, are the catalysts for economic growth in the country. Acting Chief Judge of Nigeria, Justice Tanko Muhammad, while commending the CBN for the introduction of the registry, said the passage into law of the Act had made it possible for inventories, equipment and other moveable assets to be used as collateral to access credit.
He gave assurance that the judiciary, on its part, would continue to ensure that disputes arising from secured lending in moveable assets were resolved speedily in line with constitutional and statutory provisions. Justice Muhammad also stressed the need for judges to be circumspect while adjudicating over disputes relating to loans secured by moveable assets due to the technical nature of the Act. He also urged parties involved in the process of drafting agreements to always state clearly the conditions governing their transactions. "This I believe will eventually prevent unnecessary litigations," he added. Read more from All Africa.
Source: All Africa