In a bold effort to improve access to finance and promote financial inclusion, the Bank of Sierra Leone (BSL) has relaunched its Collateral Registry campaign, aiming to ease the process of securing loans for individuals and businesses alike. The event, held on March 14th at the Sam Bangura Building in Freetown, marked a renewed push for public awareness of the registry, which allows lenders to assess and prioritize collateral offered by borrowers.
The Sierra Leone Collateral Registry, supported by the Sierra Leone Diversification Project under the Ministry of Finance and funded by the World Bank, is a web-based system designed to transform the way collateral is used in securing loans. By allowing lenders to register, search for existing registrations, and secure their interests, the registry gives borrowers greater flexibility in using both movable and immovable assets to obtain credit.
Speaking at the event, Philip Bangura, Assistant Director of the Banking Supervision Department, emphasized the significance of the registry in modernizing Sierra Leone’s financial system. “The collateral registry enables lenders to perfect their security interests and establish priority over the assets used as collateral, whether they are movable items like motorbikes, vehicles, or laptops, or immovable properties such as land or houses,” he explained.
Before the introduction of the Collateral Registry, banks typically preferred immovable assets like land and buildings as collateral, often excluding small business owners or individuals who lacked such assets. With the registry, movable property—often the most valuable capital for small and medium-sized enterprises (SMEs)—can now be used to secure loans, opening the door for a wider range of borrowers, including self-employed individuals and entrepreneurs.
“This system was created to support those who may not have formal employment or a steady salary,” Bangura said. “With the Collateral Registry, individuals who own valuable equipment or assets can now use those as collateral to access loans, giving them the financial support they need to grow their businesses.”
In addition to expanding access to credit, the BSL is also committed to promoting financial inclusion, particularly for women and individuals with disabilities. Bangura highlighted programs aimed at encouraging savings as a key factor in building financial trust between individuals and banks. “We want to create an environment where people see the value in saving with banks, which in turn makes it easier for banks to assess their financial habits and lend more confidently,” he stated.
Bangura stressed that the Bank of Sierra Leone’s primary goal is to create an enabling environment for easier access to credit. The registry is part of a broader strategy to ensure that lending is secure and that borrowers understand the responsibilities of taking out loans. He pointed out that prior to the registry, banks did not share information on borrowers, which allowed individuals to default on loans with one bank while securing new loans from others.
“This lack of communication between banks was a major challenge, but with the Collateral Registry, all loan data is shared with us, and banks are required to check a borrower’s credit report before approving a loan,” Bangura explained. “If a borrower has an outstanding default, they will be required to clear it before accessing any new loans.”
The BSL has implemented strict measures to prevent loan defaulters from exploiting the system. Defaulters will be blocked from obtaining new loans until their debts are cleared, and those with written-off loans will face a five-year borrowing ban. “Even if a loan is written off, it doesn’t mean the borrower is free from their obligations. The debt remains on record, and no further loans will be granted until the issue is resolved,” Bangura emphasized.
The Bank of Sierra Leone also announced plans to launch a nationwide financial literacy campaign during Financial Week. The campaign will target schools, markets, and social institutions, providing education on responsible borrowing and financial management. “We want people to understand when and why to take a loan. Borrowing to expand a business increases the chances of successful repayment, but it’s important that loan repayments align with business profits,” Bangura concluded.
As the BSL continues to push for greater financial literacy and access to credit, the Collateral Registry is poised to play a crucial role in empowering individuals and businesses, helping them build stronger financial futures in Sierra Leone.
Credit: Mohamed J Bah Awoko Newspaper
