SECURED TRANSACTIONS IN MOVABLE ASSETS ACT, 2017

An Act enables the use of movable assets as collateral for loans and establishes a national collateral registry. It targets small businesses, farmers, and lenders to facilitate credit access. This aims to reduce reliance on real estate for securing loans.

What Is This Policy?

An Act that modernises the legal framework for using movable assets (equipment, inventory, receivables, livestock, crops) as collateral for loans, and establishes a national collateral registry. Constitution of the Federal Republic of Nigeria 1999; Companies and Allied Matters Act; Banks and Other Financial Institutions Act; Hire Purchase Act; UNCITRAL Legislative Guide on Secured Transactions; Collateral Registry Regulations (CBN)

MSMEs and farmers seeking credit secured on movable assets Commercial banks, MFBs, and other lenders The National Collateral Registry (operated by the CBN) Legal practitioners advising on secured transactions

Who Does It Target?

Small and medium enterprises (SMEs), traders, and farmers seeking to use movable assets as loan collateral. Banks, microfinance institutions, and other lenders extending credit against movable assets. The National Collateral Registry (NCR) as the registration body. Legal practitioners, insolvency practitioners, and courts administering secured transactions.

What Does It Aim to Achieve?

Expand access to credit for individuals and MSMEs by allowing them to use movable assets as loan collateral, reducing dependence on real estate as the only acceptable security.

Key Features

National Collateral Registry: Establishes an electronic registry where security interests in movable assets are registered, creating a searchable public record. Priority Rules: Sets out clear priority rules for competing security interests based on registration date. Wide Asset Coverage: Covers tangible assets (equipment, vehicles, livestock) and intangible assets (receivables, bank accounts, intellectual property). Enforcement Rights: Provides creditors with efficient self-help enforcement rights on default, reducing reliance on slow court processes.

Current Status

Rollout Stage: Active - National Collateral Registry is operational Coverage: Nationwide Beneficiaries: MSMEs, farmers, individual borrowers, and lenders Funding: Registry fees; CBN operational budget

How to Access

Lenders must register security interests in the Collateral Registry Borrowers must own the movable assets free of prior encumbrances Security agreements must be in writing Application method: Access the National Collateral Registry at https://collateralregistry.ng

Important Terms

Unregistered security interests rank below registered ones Self-help enforcement must be exercised without breach of the peace Priority goes to the first registered security interest

Impact & Metrics

Hundreds of thousands of small businesses gained access to credit using previously unacceptable collateral, contributing to financial inclusion goals.

Official Resources

Website: https://collateralregistry.ng Contact: Central Bank of Nigeria (CBN) / National Collateral Registry

Legal Framework

Constitution of the Federal Republic of Nigeria 1999; Companies and Allied Matters Act; Banks and Other Financial Institutions Act; Hire Purchase Act; UNCITRAL Legislative Guide on Secured Transactions; Collateral Registry Regulations (CBN)