38th Annual IACA Conference in Savannah, Georgia

Establishment and Operations of the Collateral Registry of Liberia

Euphemia Gbadee Swen-MonmiaSavannah, Georgia May 19, 2015

OUTLINE Macroeconomic DevelopmentsLiberia Financial Sector LandscapeChallenges 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 LANDSCAPEThere 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 FACEDLack 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 FRAMEWORKRIGHTS 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

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OPERATIONS OF THE REGISTRYREGULATION AND

SUPERVISION DEPARTMENTDIRECTOR

DEPUTY DIRECTOR ASSISTANT DIRECTOR & REGISTRAR

PULIC ACCESS SITES

CBL PUBL

IC ACCESS SITE

LIBA PUBL

IC ACCESS SITE

FINANCE

CAPACITY BUILDING &

PUBLIC EDUCATION

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Administrative structure of the Registry

Operations of the RegistryThe 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 RegistryAll 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

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INDIVIDUALS 20

SEARCHES

85

DEBTORS

INDIVIDUALS 34

SMALL FIRMS 6

MEDIUM FIRMS

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

82%

17%1%

VALUE OF FINANC-ING STATEMENTS IN

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

Jun.-Sept. 2014 Oct.-Dec. 2014 Jan.-Mar. 201505

1015202530354045

Relationship between # of Searches and Registration

SearchesRegistration

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 !!!!!!