By Fred Yaw Sarpong
The Bank of Ghana, the regulator of the banking industry, will officially launch the Collateral Registry, even though it is currently in operation. This is in order to streamline the activities of the credit delivery market in the country.
Through a collaborative effort with the International Finance Corporation (IFC) and the Swiss State Secretariat for Economic Affairs (SECO), the Bank of Ghana has redesigned the registry’s operations and systems to conform to international best practices.
The result of this collaboration led to the adoption and publication of Rules and Regulations for effective implementation of Act 773; draft amendments of the borrowers and lenders Act 2008 (Act 773); the development of an automated web-based Collateral Registry System; and sensitization and awareness creation campaigns on the provisions of the Act 773 and the operations of the registry which are ongoing.
The Collateral Registry was established by Parliament under the Borrowers and Lenders Act, 2008 (Act 773) to principally register charges and collaterals created by borrowers to secure credit facilities provided by lenders.
Apart from registrations, the registry also provides information on the existence of relationships between lenders and borrowers as they relate particularly to movable and immovable collateral’s as well as other ancillary functions.
Borrowers and Lenders Act 2008 (Ac t 773) enacted by Parliament in 2008 to address the deficiencies in the current legal environment for effective credit delivery by making provisions. It addresses a legal framework for credit; standards of disclosure of information by borrowers and lenders; prohibiting credit practices; and promoting a consistent credit enforcement framework and related matters in the credit market.
Since the registry started operation in 2010, provisional measure, registrations of security interests as well as other services rendered by the registry including search requests were carried out in a semi-automated mode.
Before the commencement of this registry, all universal banks in the country which were already connected to the Central Securities Depository (CSD) platform, were allowed to register charges electronically.
Rural Banks, Finance Houses, Savings and Loans Companies, Leasing Companies also registered electronically. All other lenders or representatives were initially registered manually with forms obtained from the Bank of Ghana website hyperlink.