The Bank of Ghana as part of its functions to regulate, supervise and direct the banking and credit system to ensure smooth operation of the financial sector, operationalised the establishment of the Collateral Registry under the statutory mandate of the Borrowers and Lenders Act 2008 (Act 773) on February 1, 2010.
The Collateral Registry was established to principally register security interests in collateral created by borrowers to secure credit facilities provided by lenders. The Collateral Registry is a notice filing registry that operates a web-based application (CRAS) designed to contain information relating to security interests in collateral created by borrowers to secured credit facilities provided by lenders.
Act 773 was enacted at a time when the credit market was plagued with numerous challenges that stifled easy access to credit by businesses particularly Small and Medium Scale Enterprises (SME’s). Act 773 sought to address the deficiencies in the credit market, by making provision for a legal framework for credit, improving standards of disclosure between borrowers and lenders, prohibiting certain credit practices, providing for an enforcement mechanism and addressing credit related matters.
Although, Act 773 was able to address some of the challenges identified in the credit market, certain credit related matters still remained unresolved. These identified challenges necessitated the passage of the Borrowers and Lenders Act, 2020 (Act 1052) which repealed Act 773.
The enactment of Act 1052 has provided a legal framework for effective credit delivery which includes; the registration of security interests, general priority rules, improved standards of disclosure between borrowers and lenders, improved recovery and repayment of debt procedures and broadens the scope of the categorisation of lenders to include individuals.
The enactment of Act 1052 and the Collateral Registry Application Software (CRAS) has further enhanced the following services rendered by the Registry to its clients:
- the platform for registration of security interest in both movable and immovable assets
- the platform for conducting searches on assets pledged as collateral
- assisting with the realisation of security interest, upon a default, without court order
- the platform for registering other post- registration activities, (i.e. discharges, amendments, transfer of registration, subordination of registration, appointment of receiver or manager and notices of default).
The Bank is committed to improving the features of the Collateral Registry Application Software (CRAS) to meet legal and international standards. The introduction of an online payment module on the CRAS by the Bank is one of the latest innovations on the Registry’s platform. The online payment module has made it convenient for users of the Registry to have easy access to the services rendered. Clients of the Registry can now pay via Mobile money and Visa/MasterCard.
Central Banks on the continent have shown great interest in the Collateral Registry. Since its inception, delegations from several countries have visited the Registry to learn about its operations in order to replicate same in their home countries. These include the Central Banks of Liberia, Zambia, West African State (Banque Centrale des États de l'Afrique de l'Ouest (BCEAO), Uganda with some Ugandan Parliamentarians, Nigeria, Malawi, The Gambia, Sierra Leone, Tanzania, Lesotho and Mozambique.
The Bank remains committed to improving the operations of the Registry, promoting awareness creation of the Collateral Registry and the legal framework for credit, i.e. the Borrowers and Lenders Act 2020 (Act 1052), Rules for effective implementation of Act 1052, etc.
The establishment of the Collateral Registry is indeed a welcomed innovation to credit delivery in Ghana.