Abstract
Author(s): PROF. GRACE OGONDA AKOLOKWU | Vol. 21(2) May 2024
Abstract
Mortgages remain credible tools of economic growth for businesses and invariably for personal, group and national wealth. Various businesses especially the small, micro and medium scale enterprises face the challenge of insufficient credit for actualization of their set organisational goals hence the need to source credit facilities outside their enterprises not only to continue in business but to increase the viability of their businesses for effective competition in both local and global markets. This article considered the necessity of chattel mortgages in boosting the economy of Nigeria and ensuring greater financial inclusion. It particularly examined how the Secured Transactions in Movable Assets (STMA) Act 2017 through its provisions encourage micro, small and medium- scaled enterprises in Nigeria by promoting chattel mortgages. It went further to examine chattel mortgages in other jurisdictions and challenges facing the chattel mortgages in Nigeria. The article found that chattel mortgages make it easier for small indigenous businesses who may not have real property which is more acceptable to financial institutions as collateral because of its nature of durability, accessibility for enforcement and continuous increase in value, to depend on personal properties such as their goods, machines and inflow accounts to attract additional credit to grow their businesses. The article discovered some challenges to chattel mortgages in Nigeria which discourage lenders especially Banks and other financial institutions from advancing credit to business organisations on the reliance of their goods as collateral; preferring and insisting on landed property as security for loans advanced. The article also highlighted some provisions of the STMA Act 2017 that make enforcement of chattel mortgages difficult and cumbersome and therefore suggested areas of reform of the STMA Act, new executive policies and guidelines to guide the registration of collaterals in the collateral registry amongst others to encourage chattel mortgages in Nigeria.
Keywords: Chattel, Mortgage, Chattel Mortgage, Secured Credit, Secured Credit Transactions.