IFC, a member of the World Bank Group, and the Central Bank of Liberia today announced the launch of the country's first collateral registry, a financing innovation that will support economic growth and job creation by allowing smaller businesses to obtain loans using equipment, inventory, or other movable assets as collateral.
The establishment of the electronic collateral registry, a public database that contains information on security interests in movable assets, will bring increased transparency to Liberia's credit system, potentially benefitting thousands of businesses in the country by unlocking large amounts of private capital.
This project has garnered support from Liberia's public and private sectors. Mr. John Davis, President of the Bankers Association, said, "We fully support the collateral registry and are committed to facilitating access to finance for MSMEs."
IFC's Resident Representative in Liberia, Frank Ajilore, said, "This collateral registry is an important part of IFC's strategy to support private sector growth in Liberia, especially the growth of smaller businesses. Working closely with public and private sector partners in Liberia, and with funding from our donor partners, IFC will continue to support innovations that will strengthen Liberia's economy and support recovery and job creation."
IFC has worked with Liberia's Central Bank to develop the legal framework and draft the regulations that will govern the operations of the registry, and is also helping Liberia implement and run the project. IFC has supported the development of collateral registries in Afghanistan, China, Ghana, Colombia,Vietnam, and in other countries, where they are successfully contributing to private sector growth.
IFC's strategy in Liberia is to support investment climate improvements and small business growth, and to encourage investment in infrastructure, and help strengthen the financial sector.
As part of IFC's Access to Finance and Investment Climate programs in Sub-Saharan Africa, IFC has helped Liberia establish a modern Commercial Code and Court, design a policy to support MSMEs, and has launched its Business Edge and SME Toolkit training programs to support small business growth.
Liberia is also one of nine countries supported by IFC's Conflict Affected States in Africa Initiative (CASA), which supports private sector growth and state building in countries recovering from conflict. CASA also provided guidance on the establishment of the collateral registry. CASA is backed by donor partners Ireland, the Netherlands, and Norway. Sweden provides additional support to CASA in Liberia.