SmartMoney

Economy

Collateral Registry will bridge $62 bn MSMEs finance gap – Registrar

small-businesses

The National Collateral Registry will bridge the 62 billion dollar finance gap of Micro, Small and Medium Enterprises in the country, its Registrar, Malam Mainasara Muhammad, has said.

This is contained in statement signed by the Public Relations Consultant to International Finance Corporation (IFC), Mr Ilabeshi Gabriel, and made available to newsmen in Kaduna on Thursday.

Gabriel stated that the registrar made the disclosure at the end of the interactive forum on NCR and Credit Reporting System held in Kaduna.

37 million MSMEs  struggling to gain access to capital

“There are about 37 million MSMEs that are struggling to gain access to the capital they need to grow because they lack collateral such as land and buildings that banks usually required.

READ ALSO  Naira weakens further against dollar

“This collateral gap between the bank and MSMEs has led to a finance gap of about 62 billion dollar, even as the MSMEs contribute significantly to economic growth and job creation.”

Gabriel said the collateral registry would help bridge the MSMEs finance gap by facilitating easier access to funding, which would ultimately boost production and create employment.

The registry, an online centralized database, allows financial service providers to register security interest in movable assets to be used as collateral to access loans.

READ ALSO  We are ready to partner with Investors to revive economy - Kano

It also contains information regarding consumer’s credit history, gathered electronically to be accessed by financial institutions and other creditors, to assess the credit worthiness of potential clients.

IFC Country Manager for Nigeria, Eme Lore, said the online registry, coupled with the CRS had been implemented in other countries like Ghana and Liberia with success.

Lore said that Nigeria remained the largest economy in Sub-Saharan Africa and a focus country for the Universal Financial Access by 2020 initiative.

“This is why we are supporting the Central Bank of Nigeria (CBN) and other stakeholders in initiating the collateral registry as well as strengthening the credit reporting system.

READ ALSO  FG enforcing state governments to cut spending, build savings

“It has previously been implemented in other countries with amazing outcomes.

“For instance, in Ghana, the collateral registry has facilitated 1.3 billion dollar in financing for the small scale business sector since it has been established in 2010.

“It has also facilitated 12 billion dollar in total financing for the business sector using movable assets as collateral.

“We are very excited that a registry is now in place in Nigeria.”

The CR, a new development with support from IFC, a member of the World Bank Group, is expected to increase local production and reduce unemployment.

Comments

Most Popular

To Top