CEU Electronic Theses and Dissertations, 2020
| Author | Ebimoghan, Esther Angonemi |
|---|---|
| Title | Financing Small and Medium Sized Enterprises in Nigeria in Light of UNCITRAL Model Law & UCC Art 9 |
| Summary | It is evident that small, micro and medium-sized enterprises (SMEs) drive economic growth in Nigeria as the sector accounts for more than 50 % of employment and over 50 % of industrial output. However, the barrier of access to finance impedes the growth of SMEs. The Secured Transactions in Movable Asset Act, 2017 (hereinafter: STMA) was enacted with the main objective of stimulating responsible lending to SMEs and to facilitate access to credit secured with movable assets. The passage of the STMA was a step in the right direction as it introduces the use of movable property, a new concept that includes also intangibles but not IP rights as collateral. Albeit, it does not make the priority of creditors maximally predictable both within and outside insolvency as this can gain the trust of creditors to advance loan accessible at a lower cost to SMEs. Again, its enforcement mechanism admits to the use of private receivers who are incentivized to act in the interest of the appointing secured creditor rather than the interest of the business, this is antithetical to the objective of the STMA. Yet again, the rules of perfection are unclear as they admit to the creation of charges at the Corporate Affairs Commission register (Hereinafter : CAC) enacted under the Companies and Allied Matter Act (Hereinafter : CAMA) .These complexities in the STMA stagnate the viability of financing SMEs through movable asset. Having these deficiencies in sight, this paper will focus on four critical elements for an efficient secured transactions law which are crucial for financing SMEs. These elements are vital to attain lower cost of credit to increase the amount of credit advanced by creditors. The first element addresses the scope of movable assets approved under the STMA. The second issue targeted is how to improve the perfection rules to make the system more transparent as far as priorities are concerned? The third element which this paper will buttress on are the rules of priority. The final element will reflect the enforcement mechanisms employed under the STMA. This paper will start with illustrating the importance of secured transactions law in financing SMEs with reference to the objective and terminology provided under UNCITRAL Model and Uniform Commercial Code Article 9 (hereinafter: UCC Art 9). The focus will be on the recently passed Nigerian STMA Act and its four key systemic defects in the light of Nigerian economic realities. The thesis will proffer recommendations that contemplate the peculiarities in the Nigerian regime. Given that the Nigerian secured transactions law reform was influenced by the UNCITRAL Model Law, which was influenced by UCC Art 9, this thesis will reference, compare and advocate for improvements in the Nigerian regime using the aforementioned laws. |
| Supervisor | Professor Tibor Tajti |
| Department | Legal Studies LLM |
| Full text | https://www.etd.ceu.edu/2020/ebimoghan_esther.pdf |
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