Liberia is now the second country in Africa to have a full-fledged electronic collateral registry, only next to Ghana, thanks to the official launch in Monrovia Wednesday of the Liberia Collateral Registry (LCR).
It was launched under the theme, “Promoting Secure Lending and Responsible Borrowing.”
The registry is a financing innovation that is expected to support economic growth and job creation by allowing small businesses to obtain loans using equipment, inventory, or other movable assets as collateral.
Our Business Correspondent George Kennedy, who was at the ceremony, reports that the registry offers the opportunity for quick and flexible collateral for businesses to have access to finance. According to founders of the LCR, Ghana’s collateral registry has yielded strong results for that economy, recording over US$14 billion.
The Liberia Collateral Registry was officially launched by the Central Bank of Liberia (CBL) in collaboration with the International Finance Corporation (IFC), a member of the World Bank Group. The ceremony took place at the Monrovia City Hall.
Present at the ceremony were members of the Liberian Legislature, the business associations, the Liberia Bankers Association (LBA), members of the Judiciary, IFC officials and the media, amongst others.
In his keynote address, CBL Executive Governor Dr. J. Mills Jones announced that the registry will be seated at the CBL Training Center at the corner of Carey and Warren Streets and the Liberia Business Association (LIBA) headquarters on A.B. Tolbert Road in Paynesville.
“We are proud that LIBA has been able to collaborate in this area to be able to reach the level of hosting the Registry,” Dr. Jones said. He announced that efforts will also be made to establish other public assets at various LIBA county chapters across the country as well as other institutions to make assets for lending accessible.
He explained that with the technology of the registry; the system can be accessed by smart phones and personal computers, etc. with internet connectivity from anywhere in and out of Liberia. He observed that the Collateral Registry will help Liberian businesses to have access to credits using things that they have had before as collateral.
According to the CBL boss, the inclusive financial system must be seen as the critical pillar to raise the people out of poverty. He pledged the CBL’s commitment to ensuring that the necessary infrastructure is in place to engender reform of the Liberian economy.
“CBL believes in getting things done. We believe in positive change and it is against this backdrop that we have continued to reform the banking and the insurance sectors,” he averred.
In his intervention, IFC Resident Representative and Head of Mission Frank Ajibola Ajilore, said the establishment of the electronic collateral registry, a public registry database that contains information on security interests in movable assets, will bring increased transparency to Liberia’s credit system, potentially benefitting thousands of businesses in the country by unlocking large amounts of private capital.
“This collateral registry is an important part of IFC’s strategy to support private sector growth in Liberia, especially the growth of smaller businesses,” he noted. The IFC Resident Rep gave assureance that working closely with public and private sector partners in Liberia and with funding from IFC’s donor partners, IFC will continue to support innovations that strengthen Liberia’s economy and support recovery and job creation.
IFC has worked with the CBL to develop the legal framework and draft the regulations that will govern the operations of the Registry, and is also helping the country to implement and run the project. IFC also supported the development of collateral registries in Afghanistan, China, Colombia, Vietnam, and in other countries, where they are successfully contributing to private sector growth.
Also making remarks, the president of the Liberia Bankers Association (LBA), John B. S. Davies, III welcomed the establishment and launch of the Liberia Collateral Registry and challenged those running the it to ensure that it works properly for all users.
Mr. Davies, who is also president and CEO of the Liberian Bank for Development and Investment (LBDI), indicated that the Liberia Collateral Registry project has garnered support from the country’s public and private sectors.
“We fully support the registry and are committed to facilitating access to finance for micro small medium enterprises,” Davies said as he warned against any attempt to restrict to paper works as, in his own word, it has been done with other projects in the past.
For his part, the vice president of the Liberia Business Association (LIBA), Mr. David K. Sembeh, praised the CBL and IFC for their innovation to facilitate access to finance for Liberian businesses. Mr. Sembeh gave assurance that as the apex business institution in Liberia, LIBA, will do everything within its powers to ensure that the Registry is properly and adequately utilized by Liberian owned businesses.
Also speaking was the president of the Liberia Chamber of Commerce (LCC), Mr. Francis Alphonso Dennis, Jr., who expressed confidence that the registry will be a success. According to Mr. Dennis, the Collateral Registry is not restricted to banks.
“The Registry can be used by anybody,” he said. The former LBDI CEO used the occasion to thank Governor Jones and his team at the CBL for initiating and implementing a series of reforms geared towards ensuring an inclusive financial sector for poverty reduction.