Around just 30% of Nigerian SMMEs currently have a loan with a bank or microfinance institution. This is mainly because many of the country’s estimated 37 million SMMEs – which are a significant contributor to the West African nation’s economic development and job creation – struggle to gain access to the capital needed for growth because they lack traditional collateral including land and buildings.
According to a World Bank statement, the Central Bank of Nigeria together with the World Bank Group, recently launched an online collateral registry to allow both low-income earners and small-scale entrepreneurs to secure loans against movable assets such as machinery, livestock and inventory.
Mainasara Muhammad, registrar of the National Collateral Registry, says the benefits include enabling businesses to leverage their assets to obtain credit for expansion, improve assets liquidity (especially short-term assets), allow asset diversification, reduce costs and promote prudent lending.
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