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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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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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.