In a bid to encourage and stimulate economic growth in the country, the National Assembly on the 27th of May 2017, passed into law, The Credit Reporting Act 2017 and The Secured Transactions in Movable Assets Act 2017 (also referred to as the “Collateral Registry Act”). In summary, these laws are aimed at assisting Micro and Small Medium Enterprises (MSMEs) obtain loan facilities from financers using immovable assets as collateral or securities.
The Secured Transactions in Movable Assets Act (2017) substantially provides for the registration of movable assets such as motor vehicles inventory, livestock, crops equipment, vehicles and accounts receivables as collateral for obtaining credit facilities from financial institutions. These immovable assets are to be registered at National Collateral Registry (The Registry) which shall be under the Central Bank of Nigeria and shall be responsible for the registration of immovable assets to be used as collateral for loan facilities.
The Credit Reporting Act essentially established the Credit Bureau. The Credit Bureau is vested with the responsibility of receiving relevant information from ‘credit information providers’ in relation to intending borrowers such as their credit worthiness, financial obligations and details of the assets intended to be used as collateral and transmitting same to the ‘credit information users’.
