Nigeria’s 37 million micro, small, and medium-size enterprises (MSMEs) play an important role in the country’s economy, but accessing loans to grow their business is difficult. A new initiative aims to change this, the article below, which was first published on the World Bank's website, explains more. 

In Nigeria, there are an estimated 37 million micro, small, and MSMEs and their contribution to economic growth and job creation is significant. However, many of these smaller businesses struggle to gain access to the capital they need to grow and prosper since they lack traditional collateral such as land and buildings.

In May 2016, the Central Bank of Nigeria launched a modern online collateral registry with the support of the World Bank Group. The registry will allow low-income people and small-scale entrepreneurs to secure loans against movable assets such as machinery, livestock, and inventory.

“This is a major achievement to help improve access to finance for MSMEs and more broadly the financial inclusion agenda in Nigeria,” said Sebastian Molineus, Director of the World Bank Group’s Finance and Markets Global Practice.

Nigeria is the largest economy in Sub-Saharan Africa and a focus country for the Universal Financial Access by 2020 initiative. In smaller countries, such as Ghana and Liberia, collateral registries established with the support of the World Bank Group have already proven to have a catalytic effect on the economies.

“In Ghana, the collateral registry has facilitated $1.3 billion in financing for the small-scale business sector since it was established in 2010, and $12 billion in total financing for the business sector using movable assets as collateral. We are very excited that a registry is now also in place in Nigeria,” said Elsa Rodriguez, the Bank Group’s project lead.

The Registry, which operationalizes the Central Bank of Nigeria’s “Regulations on Registration of Security Interests in Movable Property by Banks and other Financial Institutions,” is a web-based system that allows lenders to determine any prior security interests, as well as to register security interests over movable assets provided as collateral.

“The benefits of the collateral registry include enabling businesses to leverage their assets to obtain credit for growth, improve assets liquidity especially short-term assets, and allow asset diversification as well as to reduce cost and promote prudent lending,” said Mr Mainasara Muhammad, the Registrar of the National Collateral Registry.

A survey conducted by the project team shows that only 31% of MSMEs in Nigeria currently have a loan with a bank or a microfinance institution, and that personal savings and business income are the most important sources of capital for financing businesses. At the same time, 82% of financial institutions surveyed said inadequate collateral is the most common challenge in granting loans.

“It took almost a year and a half to reach this milestone, and there have been quite a few challenges along the road. Persistence and patience are important in these types of projects,” said Alejandro Alvarez de la Campa, the Bank Group’s Finance and Markets Practice Manager for Sub-Saharan Africa.

The collateral registry was implemented in partnership with the Central Bank of Nigeria, and funded by the UK’s Department for International Development, DFID. 

 

kingsley5884:
A

Flexherbal:
Ok

Kwonder:

AnonyNymous:
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okonja:





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AnonyNymous:

ourchoice:
Why must every Nigerian government entrepreneur policy be about forcing Nigerian youths into farming?

Why can't our government talk about empowering Nigerian youths in technology development and ICT skills Why are these old Nigerian politificians so bent on throwing all Nigerian youth without a political connection to the farm This is sad

A country without her own technology can never be great! Agriculture is not the cure to Nigeria's backwardness and economic woe, technology development is the only rescue to our national backwardness in every sphere of life!

Africa must rise above #Agriculture and #Farming, Africa must take her place in global technology and innovation, and the time is now. We must stop electing old fools into leadership because the only good thing they can think of is how to go to farm and nothing else

#SayNoToForcingNigerianYouthsToFarm

TheGoodJoe:


If you do not want to farm, leave it and do not try to discourage those who want to.

The investment and time line for a technological movement will not yield dividends soon. The farming movement will create immediate employment, drive down the dependence on imported foods and reduce the cost for goods.

Please, those who are ready to role their sleeves should make use of the opportunities now.

TaiKuun:
to those who are ready to farm, there's nothing you can say that would discourage them. so just save your sermon for another day, please.