Collateral registry regulation will stimulate lending to MSMEs – CBN

Central Bank of Nigeria (CBN) has said that  the collateral registry regulations approved recently was designed to stimulate lending to  micro, small and medium enterprises (MSMEs) in the country.
The document signed by the CBN Governor, Mr. Godwin Emefiele and was posted on the CBN website said that lending to MSMES  would be improve by providing a mechanism for efficient registration of security interests in movable property and realisation of such interests in the event of a default.
The document also expected to support prudent lending policy in the industry and provide information on the existence of relationships between lenders and borrowers as they relate particularly to movable and immovable collateral as well as other ancillary functions.                            It said that the registry is also to play a key role in creating an enabling environment to ensure easy access to credit.
The document further stated that the Governor of the CBN may issue guidelines to govern the functions and operations of the collateral registry from time to time while the collateral registry shall accept for registration financing statements in the prescribed form which shall be electronically transmitted.
According to the document,  “the collateral registry shall be accessible at all times except if precluded by maintenance, technical and security constraints.”
In respect regulations, the CBN stated that the determination of whether goods are consumer goods, equipment, farm products or inventory is to be made at the time when the security agreement is concluded, adding that the secured creditor may rely on representations of the debtor, as to the intended use.
“These regulations apply to all security interests in movable property created by an agreement that secures payment or other performance of an obligation, regardless of the form of the transaction, the type of movable property or the nature of the secured obligation.