According to reports reaching us, Nigerians may soon be able to use items such as livestock, crops and equipment as collateral to get a loan.
This comes on the heels of a decision by the Central Bank of Nigeria (CBN), that the Credit Bureau Association of Nigeria (CBAN) and the International Finance Corporation (IFC) are to work towards improving access to loan facilities for small businesses in the country.
The initiative aims at encouraging banks to lend money to small and medium enterprises, using movable assets as collateral.
The institutions held a one-day workshop in Kaduna, on Wednesday, to create the needed awareness on the new financial infrastructure.
Speaking on behalf of the IFC, Mr Ubong Awah, identified the new infrastructure as Collateral Registry (CR) and Credit Reporting System (CRS).
Mr. Awah explained that the infrastructure would allow small and medium-scale enterprises (SMEs) to use any movable asset as collateral to access bank loans.
He stated that the National Collateral Registry (NCR) now allows financial service providers to register security interest in movable assets.
The NCR is an online centralised database which commenced operation in May 2016,
Mr. Awah said that the registry, set up by the federal government was being maintained in line with CBN regulations.
According to him, the innovation would facilitate easy lending by financial institutions to individuals, farmers, micro entrepreneurs and SMEs.
“The registry will enable these categories of borrowers to use movable assets such as inventory, livestock, crops equipment, vehicles and accounts receivable as collateral for loans.”
Mr. Awah also described the CRS as a document that contains information regarding a consumer’s credit history based on data gathered electronically by financial institutions and other creditors.