World Bank supports access to finance in Sierra Leone with collateral registry
The World Bank has launched collateral registry in Sierra Leone, an innovative financial tool that will allow smaller businesses to use movable assets like machinery to access loans, helping them grow.
Hosted by the Bank of Sierra Leone, the online registry was developed with the support of the World Bank Group and the UK’s Department for International Development (DFID). It will increase the financing options for entrepreneurs and smaller businesses that lack traditional collateral such as land and buildings to access credit.
“This collateral registry is an important financial and technological tool that will help small businesses in Sierra Leone unlock their assets to access the loans they need to grow,” said James Seward, Practice Manager for the World Bank Group’s Finance and Markets Global Practice. “It is also part of the World Bank Group’s strategy to support overall economic growth in Sierra Leone, and increased financial inclusion.”
Collateral registries are public databases that allow financial institutions to register their security interests in movable assets used by borrowers for loans, and contain information on movable collateral belonging to potential borrowers. These registries enhance transparency in the credit system, and strengthen the financial infrastructure.
Sierra Leone is the fifth country in sub-Saharan Africa to establish a modern, online collateral registry with the support of IFC and the World Bank, following Malawi, Ghana, Liberia, and Nigeria.
Accessing credit has traditionally been difficult in Sierra Leone, leaving small businesses with limited options. The new registry should break down barriers to lending. It went live in December 2016, and 72 registrations have already been entered in the system for various types of collateral.