ENTERPRISE54 – World Bank development finance unit International Finance Corporation (IFC) has disclosed plans to help Nigerian Micro Small and Medium Enterprises (MSMEs) access loans using common moveable collateral like laptops, generators instead of parcels of land, buildings and other hard-to-own fixed assets.

A significant number of MSMEs have not been able to secure credit for growth and expansion due to the heavy collateral demand imposed by banks and other financial lenders. Overbearing interest rates and unreachable collateral demands have accounted for over 80 percent of credit gap in the MSME sector thereby crippling its growth.

According to a BusinessDay report, Nigeria’s N200 billion SMEs Credit Guarantee Scheme (SMECGS) which was established to encourage banks to lend to productive sectors of the economy achieved less than 20 percent utilisation, thereby defeating its purpose.

IFC’s innovative approach to launch a collateral registry in December, lets MSMEs present readily available securities like jewelry, shares and stocks, vehicles etc, as alternative collateral in exchange for loans.

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