CBN approves movable collaterals for MSME’s bank credit

[Mirror]

The Central Bank of Nigeria, CBN, has approved that Micro Small and Medium Enterprises, MSMEs, can use movable collaterals to secure credit from financial institutions as from next year.

Disclosing this to journalists at the end of the MSME financing conference and D-8 workshop in Abuja, the Director, Development Finance of the CBN, Mr Paul Eluhaiwe, said his Department had secured approval of the management of the CBN and will ensure that collateral registry are movable collateral and would ensure its use beginning from next year.

Eluhaiwe said the CBN, in collaboration with the International Finance Corporation, IFC, would want to see a situation where MSMEs are able to use movable collateral to secure credit in banks to build operational capacities.

"If this is done, operators will be able to operate because there would be funds and capacities 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.

"Most banks are not ready to support SMEs with facilities, because they feel they do not have the collaterals and banks depend only on fixed collateral in this country," Eluhaiwe added.

He noted that by 2014, the CBN will start implementing the N220bn MSME development fund.

"That is what we are concentrating on. We know that before December, we would have worked out all the issues to make it work for us as a country because we know that it is required for us to move forward," he added.

National Mirror

[Folami David]

Central Bank of Nigeria has done so well to aid development in Nigeria so I must really kudos them for a job well done.