New collateral database registry to ease access to credit |04 May 2021
Since yesterday, Seychelles now has a centralised, electronic public database to primarily register movable assets pledged as collateral by businesses and individuals to secure loans.
A collateral registry is a record of legal claims to personal property used as collateral for a loan, allowing lenders to check if collateral being offered as security for a loan has already been pledged to another lender.
The project, initiated in 2013, is a collaboration between the Central Bank of Seychelles (CBS), the Office of the Registrar General (ORG) and the Department of Information Communications Technology (DICT), with the assistance of the World Bank, through its Financial Sector Reform and Strengthening Initiative (FIRST).
It is aimed at setting up a modern secured lending system and a Collateral Database Registry for movable property and is in line with the Financial Sector Development Agenda.
The Collateral Database Registry is also in line with the coming into force of the Secured Transactions Act, 2015, which governs the system.
The drafting of the Secured Transactions Act, which was enacted and assented to in September 2015, was the first step in paving the way for designing the Collateral Database Registry.
The system which has been developed by DICT will be maintained and administered by the ORG.
In a press conference yesterday at the CBS board room, First Deputy Governor of the bank, Christophe Edmond, head of the Financial Surveillance Division Aaron Leong-Pon, Registrar General Wendy Pierre, along with Krisl Gopal who is the principal analyst programmer at the DICT gave details on the newly launched Collateral Database Registry.
Movable assets that can be registered on the system may be in the form of serial numbered collaterals such as motor vehicles and equipment, or non-serial numbered collaterals such as furniture, crops and livestock, among others.
The registration is to be done by Secured Parties, which can be entities providing credit granting facilities as well as entities or individuals wishing to register movable assets for purposes other than providing credit facilities, as provided for under the secured Transactions Act.
This can be both domestic and foreign entities and individuals.
Secured Parties have to obtain the necessary electronic identification (e-ID) and user account from the ORG to access and input information in the system, and besides registering security interests in movable properties, they will also be able to file notices of amendments, continuation and termination.
A fee of R500 will be applicable each time a notice of security interest, amendment, continuation and termination is filed and payment can be made online directly through the Collateral Database Registry using debit or credit cards or in cash at the ORG within 30 days.
It is also important to note that conducting searches or filing a notice of objection do not require a user account and as such the Collateral Database Registry can be accessed by the general public, free of charge, for these two processes.
It is the responsibility of the secured parties to ensure the accuracy, credibility and validity of all information entered into the system, while a certificate, digitally authorised by the ORG, for each notice filed, except for Notice of Objection, becomes available for printing by the Secured Party once the process is completed, upon payment of the prescribed fee within the specified timeframe.
Anyone can also view the certificates through a search.
The Collateral Database Registry provides for a more streamlined registration of collaterals, eliminating the manual processes that the ORG was undertaking for such registrations.
It also provides for a faster and more convenient platform for interested parties to conduct searches and determine whether assets being offered by borrowers as collaterals for loans are already pledged.
In addition, such a system is expected to become a key tool that will contribute towards improving access to credit by the private sector, including the Micro, Small and Medium Enterprises (MSMEs), given the process of registering movable assets will be done faster.
With the coming into force of the Secured Transactions Act, 2015 and corresponding Regulations, the prior legislation governing the registration of movable properties, the Security on Movables Act, 1965, is repealed.
All movable properties registered at the ORG under the Security on Movables Act will be gradually migrated to the Collateral Database Registry by the respective Secured Parties.
Transactions that were concluded and entered into the registry as per the Security on Movables Act will continue to be determined under the provisions of the Security on Movables Act.
A kiosk has been set up at the ORG where the Collateral Database Registry can be accessed, while the office can be contacted on the following telephone numbers: 4280908 or 4280907 or by email: email@example.com for any queries or assistance regarding the Collateral Database Registry.
Roland /CBS Press Release