Can Introduction of Collateral Registries for Movable Assets Spur Firms’ Access to Credit in Nigeria?

International Journal of Research and Scientific Innovation (IJRSI) | Volume V, Issue XII, December 2018 | ISSN 2321–2705

Can Introduction of Collateral Registries for Movable Assets Spur Firms’ Access to Credit in Nigeria?

Danjuma Ahmad

 Lecturer, Department of Economics, Faculty of Social and Management Sciences, Adamawa State University, Mubi-Nigeria

Abstract:-Access to credit remained one of the topmost obstacles to micro small and medium enterprises doing business in Nigeria. Due to the fact that financial institutions basically prefer lending against fixed collateral, most studies in the past look try to look at the impact of fixed collateral assets on access to finance. However, recent studies found that majority of MSMEs keep their assets in movable assets, and as a result there has been a gradual reform on movable assets across many countries of the world based on the advice of World Bank and International Financial Corporation. This study therefore, investigates the prospects and challenges associated with the introduction of collateral reforms on movable asset on firms’ access to finance in Nigeria. The result should assist regulators and policy makers to focus on addressing these challenges so as to make the reform a successful one. The study found that lack of physical access to financial institutions, regulatory arbitrage, lack of sound financial education and technical problems are among the factors that constraints the smooth operation of the reform. It therefore recommends that attention should be given to these identified problems in order to make the reform a successful one.

Keywords: Movable collateral, Credit constraints, information asymmetry, MSMEs.


Lack of sound financial infrastructure is one of the major problems in the credit market for small and medium enterprises in many countries of the world including Nigeria. Therefore, sound financial infrastructure will help countries to reduce the information asymmetries and uncertainties that increase risk to lenders and constraints the supply of finance to enterprises. Firms in Nigeria, like in many other countries, experiences such problems too.

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