“For you to have sustained economic development, you have to promote the economic emancipation of women,” said Sierra Leone’s Bank Governor, Professor Kaifala Kallon.
Delivering a keynote address at the launching of the public relations roll out of the upgraded Sierra Leone Collateral Registry, yesterday Thursday 3 November at the Radisson Blu Hotel, Aberdeen the Bank Governor said that women economic status has been shackled at the bottom rung of the socio-economic development ladder because, the conditions to access loans are unpropitious to women.
“Historical for you to get a loan you have to an immovable asset such as a house or land. However, in our society access to these assets are skewed towards men. In our traditional society women can not even own land, so if you put access to credit and you link it to the ownership of land and houses then you would have a situation wherein women would be excluded from the financial system; but they are the people who are mostly likely to improve social and economic capital development,” he said.
The Bank Governor also added that the banks are patterned after the English merchant banking system, thus they had no interest in giving access to capital to the villages because the transaction cost was too high buy the time loans get to the end user the interest rate is very usurious.
Professor Kaifala Marah noted that it is against this socio-economic millieu that “the Bank of Sierra Leone decided that creating a collateral registry that allow the use of both move able and immovable assets as collateral in order to improve access for young people, women in particular to finance.”
The Bank Governor explained that movable assets can now be used to have access to credit.
He said when women and young people get access to finance without the collateral that traditional financial institutions demands, “we are going to increase employment in the system; we are going to increase the income of women in the system and we are go to increase the ability of their children to take advantages of opportunities that government can provide.”
However, he admonished that if borrowers refused to pay back their loans, that access is going to close.
“There is going to be great responsibility on us the people of this country to pay back our loans so that we can get more and improve the economic circumstances of the people of this country.’
With regards to sensitization of the Collateral Registry, Professor Kallon advised that it would be necessary to bring to the fore traditional leaders as part of the sensitization so that they would disseminate the message to the people within their communities, since they are most trusted and revered in their respective communities.
Minister of Trade and Industry Hinga Sandy remarked, that the upgraded Collateral Registry is also part of President Bio’s agenda of expanding financial inclusion.
He also said when the countries are been assessed as to whether they have been able to improve their doing business environment, this is one of the indicators. According to the Trade Minister “all of these efforts to upgrade our Collateral Registry is part of why Sierra Leone qualified for the MCC compact.”
Giving an update about the Collateral Registration, Assistant Director Market Discipline Division Banking and Supervision Department, Philip Bangura explained that regulations have been completed and has been forwarded to the Ministry of Finance for it to be tabled in parliament. He said BSL has also provided training for micro finance institutions on how to use the Collateral Registry. According to Philip commercial banks are already using the system only those who have challenges BSL have provided assistance.
He said that a total of 964 security interest have been registered as at 31 October, which is 48.65% of that registration was done this year.
Also adding that a total of 239 security interest notices were provided for female borrowers. “We noticed that women are getting access to loan, because about 69% of the 239 registered this year,” Philip averred
He said 82.37% of the registered security interest notice were credit granted to borrowers on the western areas. “We note that even though we are trying to bridge financial inclusion we see that most of the collateral registered are within Freetown so we expect after this campaign we are hoping to see more coming from the provinces because that is the essence of financial inclusion.”
The Sierra Leone Collateral Registry is an initiative of the Bank of Sierra Leone (BSL) to improve access to finance particularly for Micro, Small and Medium-Sized Enterprises (MSMEs).
It is a web-based system that allows lenders to search for any registrations relating to prior security interests, as well as perfect and establish the priority for their security interests over movable and immovable assets provided as collateral. The Collateral Registry facilitates the use of movable and immovable property as collateral which may remain in possession or control of the borrowers and thereby improves access to secured finance because:
Movable and immovable assets or property often account for most of the capital stock of MSMEs;
Movable and immovable assets are the main types of security that MSMEs, especially those in developing countries, can use to obtain financing; and
Given the opportunities in agri-business, the Collateral Registry regime allows farmers and entrepreneurs to unlock significant sources of capital with assets that would otherwise not be considered by lenders as potential collateral.
The web-based nature of the system offers remote access from the comfort of your location even beyond normal business hours without visiting the registry office. It reduces and frees registry officials from paper burdens, manual reviews, searches and storage costs.
The collateral registry software automatically assigns a sequential registration number, date and time of registration to each security interest notice accepted for registration.
The system stores and makes it available to searchers who use the appropriate search parameter information submitted by users relating to the security interest.
