AGA-Africa Alliance Partnership in collaboration with the National Collateral Registry (NCR) organized a one-day workshop on the role of secured transactions in movable assets act in financing MSME in Nigeria on 28th March, 2019 in Lagos.
The workshop was aimed at generating a better understanding of the regulatory framework for secured transactions in movable assets and create needed awareness of how MSME can benefit from this Act. The workshop brought together participants from financial regulators, credit finance practitioners and financial institutions or MSMEs.
Hon. Joseph Abang, AGA-Africa Goodwill Ambassador and the Attorney General of Cross River state in his opening remarks noted that assets and finance is a fundamental factor in the growth and development of any economy and is considered to be a driving force in private sectors development.
“It is unfortunate that more than 70% of private enterprises have limited or no access to credit. According to the International Financial Corporation (IFC), lack of asset and finance is a key constrain to the growth of financial institutions and MSMEs.”
Bisi Toro-Popoola Asst. Registrar, National Collateral Registry, Development Finance Department, Central Bank of Nigeria facilitated a session on Enhancing Ease of Access to Finance. She noted that a financial infrastructure for MSME lending is a notice-based registry for collaterals, publicly available database of security interest in moveable assets, databank where security interests in moveable assets are registered for the purpose of being used as collateral to obtain facilities from financial institutions; allows borrowers to prove their creditworthiness and lenders to assess their priority interest in potential claims against particular collateral and a registry improves both access to finance and induces prompt repayment, i.e. provides a win-win for the borrower and lender simultaneously.
Attorney John Ukegbu ESQ, CWAG AAP Speaker, Senior Staff Attorney at Northeast New Jersey Legal Services spoke on secured transactions involving movable assets.
He noted that the Uniform Commercial Code, Article 9 is the most important article as it provides the governing rules for any transaction that combines a debt with a creditor’s interest in a debtor’s personal property.
Chief Anthony Idigbe, SAN AGA AAP Speaker presented an overview of regulatory framework for secured transaction in movable assets in Nigeria. He noted that the challenges of implementation and mindset change require administrative structure, interfacing and funding, understanding regulatory objectives particularly for change drivers and the industry, existing jurisprudence and responsive regulation.
“Debtors and creditors should challenge any registration of financing statement before mediation and dispute resolution panel and resort to the High Court if dissatisfied with panel decision under Sec. 56 as there is right of action for breach of duty under the law.”
Hillary Nwaukor, CEO i-naira.com discussed the strategic importance of secondary derivative market platforms for the completeness of the national collateral registry & standardization of moveable asset disposal processes under the STMA Act. He noted that NCR has agreed that a Non-Financial Service that is Auction Class Portal on the NCR Portal is necessary.
“The portal will accommodate online auction platforms that are strategically positioned to render online asset disposal services which is the missing link in the NCR ecosystem.”
Obinna Nwankwo, Legal Services Department, Central Bank of Nigeria, Abuja spoke on the Secured Transactions in Movable Assets Act. He noted that every public registry established by any Act of the National Assembly to co-ordinate, warehouse, or oversee transactions in movable assets in Nigeria shall be operated in a manner that creates automatic interface between such registry.
“The Act does not apply to any right of set-off, the creation or transfer of an interest in land other than account receivables and any interest created by a transfer, assignment or mortgage in movable property governed by a law for which a registry has been established with regards to ships and aircrafts.”