The modern web-based Collateral Registry Ghana, the first movable and immoveable asset Secured Transactions Registry (STR) in Africa, is set to improve the country’s credit system, further propping its expanding economy, the Governor of the Bank of Ghana (BoG) has said. Dr. Henry Wampah made this observation at the launch, in Accra, of the newly redesigned Collateral Registry Ghana that upgraded it to an international standard STR. He noted that within three years of operation, since its establishment on February 1, 2010, as a consequence of the passage of the Borrowers and Lenders Act, 2008 (Act 773), the Registry has performed remarkably. “By end of March 2013, a total of40,096 charges, or secured loans, with 104,308 collaterals had been registered of which 80.6% were movable assets and 13.3% were immovable, with the remainder being a combination of both types,” Dr. Wampah said.
Ghana’s private sector, especially the SMEs which dominate the country’s economy, has over the years been bedeviled with a lack of access to adequate and affordable credit because they generally do not have immovable assets demanded by financial institutions as collateral.
“Almost 160 institution, both local and foreign, have so far accessed the Registry for registration, while there have also been 14,608 searches conducted by various lending institutions, law firms and the general public,” Dr. Wampah said adding that the Registry has attracted significant interest from other African countries who have visited to study the processes involved in its establishment and the redesign project. Dr. Wampah however notes that there are some challenges BoG will still have to grapple with to ensure the realization of the full benefits of the STR to the economy.
“The most important of these which requires immediate policy focus is the problem of duplication of registration and disjointed records associated with the absence of harmonisation between the Collateral Registry and other registries, including the Company’s Registry, Lands Commission, and the Driver and Vehicle Licensing Authority ,” Dr. Wampah said.
The Minister of Finance and Economic Planning, Mr. Seth Tekper observed there were other challenges faced by participants of the credit market, including the lack of a unique national identification system, which makes identification of borrowers problematic leading to certain malpractices.
“As a pragmatic and comprehensive solution to the challenges regarding the National Identification Programme, government has made a commitment in the 2013 budget to consolidate the role of the National Identification Authority to be responsible for the compilation and management of all primary biometric data for official use.
“There are some gaps and inadequacies about the Act in respect of Secured Transaction standards and international best practices,”Tekper said, adding that to address these, government and BoG in a collaborative effort with the International Finance Corporation (IFC) have prepared an amendment to Act 773, which the ministry through cabinet will forward to parliament for consideration.