Micro, small and medium-sized enterprises (MSMEs) represent 96% of Nigerian businesses, so, it is crucial to support their growth and innovation. One of the most important difficulties facing MSMEs is Access to Finance. According to the International Financial Corporation (IFC), lack of Access to Finance is a key constraint on the growth of MSMEs in sub-saharan Africa, and thus is an important limitation on employment, economic growth and shared prosperity. Therefore the National Assembly in an effort to tackle some of the systemic challenges that have made access to finance such a thorny issue for such a long time has passed the Secured Transaction in Movable Assets Act which was signed into Law in July 2017.
The STMA Act allows MSMEs and even individuals to use their movable assets as collateral for accessing loans. This includes all rights, interests, and benefits related to ownership of items other than real estate. Items of personal property can be tangible, such as a chattel, or intangible, such as a debt or patent, typically not permanently affixed to real estate and are Movable. The STMA will give creditors an effective way to discover whether the potential borrower has already been granted a security interest in the collateral and if so what priority those rights have. The STMA is enhancing the Financial Inclusion in Nigeria while facilitating the perfection of security interest in movable assets and establishes the National Collateral Registry.