CIBN warns small business owners over asset falsifying for bank loans
The Chartered Institute of Banker of Nigeria (CIBN) on Thursday cautioned Micro, Small and Medium Enterprises (MSMEs) against using false assets as collateral to obtain loans from commercial banks operating in the country.
The President of CIBN, Professor Olusegun Ajibola, gave the caution at a breakfast session organised by the institute for stakeholders in the banking industry in Lagos.
The session, which was themed: Collateral Registry Act: Pros and Coins for the banking industry and other stakeholders.
CIBN boss, said that the small operating scale of most MSMEs did not afford them the opportunity to meet collateral requirements of fixed assets such as real estate for accessing loan from commercial banks.
According to him, “On the contrary, banks are wary of the level of risk associated with such business considering the less-than-encouraging business environment in the country.
“For instance, the World Bank Ease of Doing Business Survey ranked Nigeria 159 out of 189 economies; hence the probability of business failure is high that lenders guide against the risk through high interest rates,’’ he said.
He, however, noted that the enactment of Collateral Registry Act, which allows MSMEs in the country to apply for credit on the strength of movable assets as collateral is a welcome innovation.
It would be recalled that the National Assembly had in May 2017 passed into law the Collateral Registry Act which gave MSMEs the opportunity to acquire loans, using movable assets as collateral.
