Th e Governor, Central Bank of Nigeria (CBN), Mr Godwin Emefi ele has said that the introduction of National Collateral Registry will unlock access to credit which has been the major concern of the Micro Small and Medium Enterprises (MSMEs) in Nigeria. Emefi ele who stated this in the maiden report of the NCR said that lack of access to credit for MSMEs in Nigeria, has resulted in a huge fi nancing gap.
He said National Bureau of Statistics report showed that micro Enterprises are about 99 per cent of the 37.1 million MSMEs in the country. Emefi ele said that traditionally, fi nancial institution prefer fi xed assets such as land and building as collaterals for loans while majority of the MSMEs can only provide movable assets such inventory and equipment. He stated that records has shown that in 2016, loans to MSMEs by Deposit Money Banks as a percentage of their total loans and advances to the economy declined to 0.067 per cent from 0.099 per cent achieved the preceding year.
He said that there is no gainsaying, that the lack of access to fi nance has been one of the major impediments to the development of the subsector in Nigeria today. He said that registry allows fi nancial institutions, banks and non banks to register their priority interest in movable assets as collateral for loans.
Th e CBN pointed out that it was on line real time notice based registry that allows borrowers to prove their creditworthiness and potential lenders to assess their ranking priority in potential claims against particular collaterals. Comparing Nigeria with other countries, he said there is empirical evidence that the establishment of collateral registries has increased lending to MSMEs in other jurisdictions.
He said that in China for instance the adoption of collateral registry resulted in 84 per cent SMEs securing their loans using movable assets He stated that the use of the registry in Mexico also grew by four times while 45 per cent went to Agricultural sector. He Expressed optimism that the commencement of operations of NCR would have tremendous impact on MSMEs lending in Nigeria as banks strive to increase lending to the subsection to 10 per cent from 0.067 in the next few years.
He said the new strategy has started yielding positive result, adding that as at August 24 this year, 136 fi nancial institutions, 22 Commercial Banks, 106 Micro Finance Banks, one non bank fi nancial institution, three Merchant Banks, three development fi nance institutions and one non interest bank have registered 16236 fi nancing statement for 20684 movable assets on the NCR platform valued at N392 billion.
