Through the Collateral Registry initiative of the Central Bank of Nigeria, the banking sector has provided about ₦1.80trn, $1.36bn and €10.92m as loans to 273,435 borrowers.
The loans were given to 262,904 individuals; 1,421 large, 4,260 medium, 1,433 micro and 3,417 small businesses.
The CBN governor, Mr Godwin Emefiele gave the figures at a virtual workshop themed, “The Role of the Judiciary in ensuring the effectiveness of the Secured Transactions in Movable Assets and Credit Reporting Acts, 2017.”
The workshop was held to sensitize Judges on concerted efforts to improve access to finance by entrepreneurs using movable assets as collateral for credit.
The apex bank had in 2017, under the Secured Transactions in Movable Assets Act unveiled the National Collateral Registry with a mandate to receive, register, store and provide information about security interests in movable assets.
Emefiele said as of September 30 this year, a total of 694 financial institutions comprising 22 Deposit Money Banks, four Merchant Banks, five Development Finance Institutions, 580 Microfinance Banks, 37 Non-Bank Financial Institutions, 43 Finance Companies, one Primary Mortgage Bank and two Non-Interest Financial Institutions, had registered on the NCR portal.
He said, “As you may well know, the National Bureau of Statistics indicates that the over 41.5 million MSMEs remain central to the achievement of these macroeconomic objectives, as they sustain about 60 million people in employment and contribute 49.8 and 7.6 per cent of gross domestic product and export, respectively.
“Ultimately, it underlines our resolve to sustain the reforms and improve public appreciation, and especially judicial perception, of its potentials.”
The NCR has been operational since 2015 to allow financial institutions register their priority interest in movable assets obtained as collateral for loans. Registration on the portal is seen as the first step towards buy-in to the registry’s operations.
“A lending relationship is based on trust and it is our belief that lenders will respond positively to the yearnings of MSMEs for greater access to finance, given the assurance that their legitimate interests will be protected under the enabling laws of the land. To this end, it is pertinent that we solicit, and get, the full support of the judiciary and law enforcement agencies towards providing a robust and resilient financial infrastructure that will deepen credit delivery to our MSMEs,” Emefiele added.
In his keynote address, chief justice of Nigeria, Justice Tanko Muhammad said the financial sector and the entire economy stand to benefit from quick dispensation of justice in commercial or business transactions.
The CJN said credit reporting reforms in Nigeria require special attention from the judiciary.
According to him, credit reporting reforms is a critical position in the economy given that movable assets are involved.
He said small businesses in the country require access to credit to thrive and the rights of the relevant parties to a transaction must be protected.
”Against this background, I wish to state that potential investors often hinge their decisions to come to Nigeria on enforceability of their rights in any commercial venture.
”Therefore, Courts must be versed with credit transactions principles, especially with the passage of the STMA Act and Credit Reporting Act, 2017.
”This means that there is need for the judiciary to be strengthened to help the financial sector protect credit transactions. The financial sector and indeed the entire economy stand to benefit from quick dispensation of justice in commercial or business transactions.
”As access to credit is necessary for the economic development of Nigeria, it behoves the judiciary to protect parties to a transaction and ensure fair and ethical standards. The purpose of both Laws is to facilitate and promote access to credit and enhance risk management in credit transactions. The protection of the rights of parties in a credit transaction would promote responsibility in the market and encourage responsible borrowing.
The administrator of the National Judicial Institute (NJI), Justice Roseline Bozimo, commended the management and staff of the Juris Law Office for sustaining the mutual cooperation and collaboration in organising workshops for Judicial Officers, thereby contributing in no small measure to deepening the jurisprudence of our Judicial Officers.
According to her, the workshop is in line with the statutory mandate of the Institute to organise courses, workshops and conferences for the continuing judicial education of Judicial Officers.
She said the principal objective of moveable assets financing laws globally is to contribute to the sustainability and stability of the financial system of every economy while protecting investors and financiers alike.
Justice Bozimo said, ”Distinguished participants, this workshop provides a platform to share knowledge and cross fertilise ideas from other jurisdictions amongst stakeholders on how to ensure efficient adjudication of disputes arising from secured lending in moveable assets in Nigeria.
”My Lords, Distinguished Participants, Ladies and Gentlemen, the role of small and medium scale enterprises in building and sustaining a nation’s economy cannot be over emphasised. Research has shown that, Small and medium scale enterprises constitute about 80 per cent of Nigerian businesses; therefore, they are very crucial to the sustenance of our economy.
”To this end, the Secured Transactions in Moveable Assets Act, 2017 was enacted to ultimately facilitate easy access to credit facilities by micro, small and medium scale enterprises. The introduction of the Act into the Nigerian legal system is a timely development that will pave the way for creditors to extend credit for the development of Micro, Small and Medium Scale Enterprises.”