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Banks to relax loan conditions for small businesses

By BusinessNews Staff on October 18, 2014

The Bankers Committee of the Central Bank of Nigeria on Thursday said it was working to finalise the establishment of a modern collateral registry that would ensure that moveable assets were accepted as collateral by banks by the second quarter of 2015.

The development will allow small customers who want loans and advances to register their moveable assets as collateral.

The committee said the collateral registry being put together was to enable Micro, Small and Medium-scale Enterprises access the N220bn MSME Fund without hitches.

It also said that some state governments that applied for the fund had begun accessing it.

Speaking after the meeting of the committee in Abuja on Thursday, the Chief Executive Officer, Stanbic IBTC Bank, Mr. Yinka Sanni, said members discussed how to ensure timely disbursement of the fund and expressed the desire to achieve this within the shortest feasible time.

According to him, the committee specifically discussed ways to encourage bank customers to apply and benefit from the fund.

He said the banks had charged themselves to reach out to customers and ensure that interested depositors send in applications and that the applications were favourably considered.

Corroborating Sanni’s statements, the Managing Director, Zenith Bank Plc, Mr. Peter Amangbo, said one of the initiatives agreed upon at the meeting was the establishment of the Modern Collateral Registry, which would ensure that smaller customers who wanted access to loans and advances could register moveable assets as security.

“We are going to have, for the first time, a central database for all security by customers of Deposit Money Banks. We believe that by the second quarter of next year, it should actually be in place and it will enable the system to grant more small and medium-scale enterprises loans,” he said.

Amangbo explained that the bankers were looking at having a registry that would be 100 per cent electronic and centralised.

He said, “We will have a central database of all moveable security by customers, especially the smaller retail ones and the consumer ones. The advantage of this is that it takes care of all security types and it enables the banks to be able to query that register.

“Each bank can come and each creditor can come and register their interests. But the key thing is that it is very easy; it will make loans much easier for retail customers, for consumer and much faster because what we need is just to query the system. It is going to be electronic and it is going to be centralised.”

In her remarks, the Director, Banking Supervision, CBN, Mrs. Tokunbo Martins, said the committee considered Nigeria’s economy to be sound in view of its macro-economic indicators compared with other jurisdictions.

She said the committee considered the move by the government to diversify the revenue sources as desirable because it would improve revenue earnings.

Martins added that it was heart-warming that the Federal Inland Revenue Service and McKenzie, which were tasked with raising the country’s revenue profile, were doing their best to surpass the targets set for them.

On the Bank Verification Number project, the Managing Director, Mainstreet Bank, Faith Tuedor-Matthews, said no charge was imposed on customers as a result.

She noted that upon the completion of the project by the end of the year, it would further improve the integrity of customer information within the banking system.

[Punch]

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