Companies and Allied Matters Act, 2020
On August 7, 2020, President Muhammadu Buhari signed into law the Companies and Allied Matters Act (CAMA). The new CAMA is Nigeria’s most signiﬁcant business legislation in three decades and it very intentionally introduces at least 15 new provisions that promote ease of doing business and reduce regulatory hurdles in Nigeria.
The Credit Reporting Bill and Collateral Registry Bill were signed into law on May 30, 2017. The two laws formalised the operations of the Nigeria Collateral Registry and the legal basis for sharing of credit information between Credit Bureaus and lenders.
What is The Collateral Registry Act
‘The Collateral Registry Act’ ensures that Micro, Small and Medium Enterprises (MSMEs) in Nigeria can register their movable assets such as motor vehicles, equipment and accounts receivable in the National Collateral Registry, and use same as collateral for accessing loans. This in turn will increase their chances at accessing financing and tackle one of the major obstacles faced by MSMEs.
What about the The Credit Reporting Act
On the other hand, ‘The Credit Reporting Act’ provides for credit information sharing between Credit Bureaus and lenders (such as banks), as well as other institutions that provide services on credit such as telecommunication companies and retailers. (A Credit Bureau is defined as a company that collects information relating to the credit ratings of individuals and makes it available to financial institutions, who need such information to determine an individual’s credit-worthiness and whether or not to grant loan applications to such individuals.)