Transcript 1st REGIONAL CONFERENCE ON CREDIT REPORTING

Establishment and Operations of the
Collateral Registry of Liberia
Euphemia Gbadee Swen-Monmia
Savannah, Georgia May 19, 2015
OUTLINE
 Macroeconomic Developments
 Liberia Financial Sector Landscape
 Challenges prior to a Secured Transaction Regime
 Collateral Registry Implementation Process
 Operations of Liberia's Collateral Registry
 Statistics of Liberia's Collateral Registry
Strategy and Prospects of Liberia's Collateral Registry
2
MACROECONOMIC DEVELOPMENTS
•
The Liberian economy recorded a decline in terms of growth from
8.7% at end 2013 to 0.3% in 2014 due to slowdown in the economy on
account of the EBOLA pandemic. Projected growth for 2014 was
6.9%. The major sector contributing to the decline is the agriculture
and fisheries sector.
•
The growth rate projected for 2015 is negative 1.1%, thus indicating a
reduction from 0.3% recorded in 2014, largely due to the prevailing
health crisis being faced by the country.
•
The economic condition of the country could experience a turnaround
if the Government and its partners continue to curb the spread of
EBOLA until Liberia is declared EBOLA free in 2015.
3
LIBERIA’S FINANCIAL SECTOR LANDSCAPE
 There are nine (9) licensed and operating commercial banks
in Liberia. One (1) of the commercial banks is specialized in
microfinance lending and another is focused in agricultural
lending.
 Commercial banks have 85 branches spread over 11 of the
fifteen political subdivisions of the country. There are seven
(7) Rural Community Finance Institutions (RCFIs); four of
which are providing financial services in the four political
subdivisions that have no commercial bank branch.
 There are twenty (20) licensed insurance companies with 30
branches and one hundred fifteen (115) registered forex
bureaux operating in Liberia under the direct supervision of
the CBL.
4
PRIOR CHALLENGES LIBERIA FACED
Lack of Adequate Legal Framework
(Law and fast track court)
Collateral Taken by Financial Institutions
(largely Immovable assets)
Immovable collaterals were overly exposed (One property deed was used as
collateral to secure several loans)
No centralized real time online registry to
register landed property that has been used
as collateral to secure credit
Movable assets alone were not option for securing loan because of the lack of
experience in Assets Based Lending and the legal framework
5
COLLATERAL REGISTRY IMPLEMENTATION PROCESS
1
2
3
COMMUNICATIONS AND PUBLIC EDUCATION
6
LEGAL AND REGULATORY FRAMEWORK
 Commercial Code Revised in 2010
• Chapter 5 on Secured Transactions; Sub-Chapter 5 on
Registration of Security Interests
• Chapter 3A on Finance Leases; Sub-Chapter 5 on
Registration of Interests
• Chapter 1 on General Provisions
 Establishment of the Commercial Court in 2010
 Secured Transactions/Collateral Registry Regulation
issued by the CBL in 2013
 Schedule of fees issued by the Registrar
 Finance Lease for Bank Financial Institution
Regulations issued by the CBL in 2011
7
LEGAL AND REGULATORY FRAMEWORK
RIGHTS AND PROTECTION OF USERS:
 CREDITORS/ SECURED PARTIES
 DEBTORS
 CONSUMERS
 SEARCHERS
 REGULATORS AND POLICY MAKERS
INFORMATION REQUIRED FOR REGISTRATION
 Identification and address of the debtor
 Identification and address of the secured party
 Collateral description (generic
 or specific)
 Duration of registration
 Type of interest taken
by the secured party
Upload of documents are permissible but optional.
BUILDING OF AN ELECTRONIC SYSTEM
 Bsystem Ghana Limited – was contracted to develop
our electronic collateral registry system consistent
with the revised Commercial Code of 2010 and the
Secured Transaction and Collateral Registr y
Regulations issued by the Central Bank in 2013.
 The electronic system was completed and launched in
June 2014.
 Offline version of the system was developed and
installed on the Registry's in December 2014.
10
BUILDING STAKEHOLDERS CAPACITY
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OPERATIONS OF THE REGISTRY
Administrative structure of the Registry
REGULATION AND SUPERVISION
DEPARTMENT
DIRECTOR
DEPUTY
DIRECTOR
ASSISTANT
DIRECTOR &
REGISTRAR
ASSISTANT
REGISTRAR
PULIC ACCESS
SITES
CBL PUBLIC
ACCESS SITE
FINANCE
CAPACITY BUILDING &
PUBLIC EDUCATION
LIBA PUBLIC
ACCESS SITE
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Operations of the Registry
 The registry operates within the Regulation and
Supervision Department of the Central Bank of
Liberia.
 The Registry’s function is Administrative. The
Registry’s staff can not add, change or delete any
information in the financing statement registered in
the system.
 Only secured parties and agents serve as registrant.
 Users can transact in the system as pre-paid and postpaid users.
 Fees are charged for registration and update of
Financing Statement in the system and to get a
certified search certificate. (Searches are free).
Operations of the Registry
 All fees are paid in Liberian Dollars, but amounts are
dependent on the loan value. The table below displays
the fees in United States Dollars for easy understanding.
LOAN
AMOUNT
REGISTRATION
FEES
UPDATE FEES
CERTIFIED
SEARCH
CERTIFICATE
FEES
</= US$7,000.00
US$2.00
US$1.00
US$3.00
US$7,001.00 –
US$50,000.00
US$4.00
US$2.00
US$3.00
> US$50,000.00
US$6.00
US$3.00
US$3.00
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STATISTICS OF THE REGISTRY
 …… up to March 2015
SEARCHES
CLIENTS
LEGAL ENTITIES
17
INDIVIDUALS
20
85
DEBTORS
REGISTRATIONS
NUMBER OF
REGISTRATIONS
VALUE OF
REGISTRATIONS
INDIVIDUALS
34
SMALL FIRMS
6
MEDIUM
FIRMS
12
LARGE FIRMS
9
61
US$249,373,358.00
STATISTICS OF THE REGISTRY
% OF THE NUMBER OF
REGISTRATION
VALUE OF FINANCING
STATEMENTS IN %
11%
1%
17%
46%
Jun.-Sept. 2014
43%
Jun.-Sept. 2014
Oct.-Dec. 2014
Oct.-Dec. 2014
82%
Jan.-Mar. 2015
Jan.-Mar. 2015
Relationship between # of Searches and
Registration
50
40
Searches
30
Registration
20
10
0
Jun.-Sept. 2014
Oct.-Dec. 2014
Jan.-Mar. 2015
STRATEGY AND PROSPECTS OF THE REGISTRY
 Partnership with private sector players, like the
Liberian Business Association;
 Capacity building for key stakeholders;
 Continuous public education and public awareness.
 Establish public access sites in leeward counties. Two
(2) counties are expected to have public access in 2015.
SAMPLE OF CAMPAIN MATERIALS
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THANK YOU
!!!!!!