Transcript

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

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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.

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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.

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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

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COMMUNICATIONS AND PUBLIC EDUCATION

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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

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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.

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BUILDING STAKEHOLDERS CAPACITY

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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

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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 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 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.

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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

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

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THANK YOU !!!!!!


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