Nigerian newspapers report generally that the central bank has now approved the use of Moveable Assets as collateral for obtaining loans. According to The Nation Article
The Central Bank of Nigeria (CBN) has approved the use of movable collaterals for Micro Small and Medium Enterprises (MSMEs) to secure credits from financial institutions from next year.
Addressing reporters at the end of the MSME’s financing conference and D-8 workshop in Abuja over the weekend, CBN’s Director, Development Finance, Paul Eluhaiwe, said the apex bank wants a situation where MSMEs would use movable collateral, adding that the regulator was working with the International Finance Corporation (IFC) on modalities for its implementation.
He said: “If this is done, operators will be able to operate because there would be funds and capacities that would be built to create sustainability in the sector. The entrepreneurs themselves who are supposed to benefit with movable collateral will have access to more financial services,” adding that most banks were not ready to support SMEs with facilities because they feel they do not have the collaterals and banks depend only on fixed collaterals in the country.
He said by next year, the apex bank would start the disbursement of the N220 billion MSME development fund.
Moveable Assets are typically divided into two. They can be assets that are not physically tied to a location but can be moved around easily. Examples are like generators, computer equipments, servers, inventories, goods etc. it cam also be intangible assets such as copyrights, trademarks, patents etc. The banking world has come to realize that for certain SME’s moveable assets constitute the most frequent kind of asset they have as they do not need to own building or landed property to remain in operation. This is a fantastic news and I hope they see it through.