Establishment and Operations of the Collateral Registry and Operations of the Collateral Registry of Liberia ... No centralized real time online registry to ... •Chapter 5 on

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  • 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

  • LIBERIAS 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

  • 6

    COMMUNICATIONS AND PUBLIC EDUCATION

    1 3 2

    COLLATERAL REGISTRY IMPLEMENTATION PROCESS

  • 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 Registry 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

    11

  • OPERATIONS OF THE REGISTRY

    REGULATION AND SUPERVISION DEPARTMENT

    DIRECTOR

    DEPUTY DIRECTOR ASSISTANT

    DIRECTOR & REGISTRAR

    PULIC ACCESS SITES

    CBL PUBLIC ACCESS SITE

    LIBA PUBLIC ACCESS SITE

    FINANCE CAPACITY BUILDING &

    PUBLIC EDUCATION

    ASSISTANT REGISTRAR

    12

    Administrative structure of the Registry

  • Operations of the Registry The registry operates within the Regulation and

    Supervision Department of the Central Bank of Liberia.

    The Registrys function is Administrative. The Registrys 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 post-paid 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.

    14

    LOAN

    AMOUNT

    REGISTRATION

    FEES

    UPDATE FEES CERTIFIED

    SEARCH

    CERTIFICATE

    FEES

    US$50,000.00 US$6.00 US$3.00

    US$3.00

  • STATISTICS OF THE REGISTRY up to March 2015

    CLIENTS

    LEGAL ENTITIES 17

    INDIVIDUALS 20

    SEARCHES

    85

    DEBTORS

    INDIVIDUALS 34

    SMALL FIRMS 6

    MEDIUM

    FIRMS

    12

    LARGE FIRMS 9

    REGISTRATIONS

    NUMBER OF

    REGISTRATIONS

    61

    VALUE OF

    REGISTRATIONS

    US$249,373,358.00

  • STATISTICS OF THE REGISTRY

    11%

    43%

    46%

    % OF THE NUMBER OF REGISTRATION

    Jun.-Sept. 2014

    Oct.-Dec. 2014

    Jan.-Mar. 2015 82%

    17%

    1%

    VALUE OF FINANCING STATEMENTS IN %

    Jun.-Sept. 2014

    Oct.-Dec. 2014

    Jan.-Mar. 2015

    0

    10

    20

    30

    40

    50

    Jun.-Sept. 2014 Oct.-Dec. 2014 Jan.-Mar. 2015

    Relationship between # of Searches and Registration

    Searches

    Registration

  • 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

    18

  • THANK YOU !!!!!!

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