Keeping an Open Mind for the Experience and Introspections of a Life Time.
By Robert D. Katz
traveled to Lagos, Nigeria earlier this spring to teach “Movable Asset Financing”, or what we refer to as asset-based
lending in North America, as part of a Commercial Finance Association (CFA) program in conjunction with the World Bank
and FITC (formerly Financial Institutions Training Center) in Africa, targeting underdeveloped countries and underserved
markets around the world.
One of the goals of the program is to expand the knowledge of market participants and help to uncover opportuni-
ties to lend in these resource-rich nations. The CFA previously held similar training programs in Colombia, Mexico,
Zambia, and India and has future programs scheduled in many other countries around the globe. My co-teacher was
Lending on collateral other than real estate and equipment is not as common outside of the United States and other developed
countries as one may think. The equivalent to the Uniform Commercial Code laws are quite new to many of these developing
nations. For instance, Nigeria’s UCC laws have been in existence for only approximately two years. But the country’s financial
leaders in charge of developing the programs have laid the right foundation.
In discussing the origin and development of movable asset financing/asset-based lending in Nigeria, Ubong Valentine Awah,
one of the representatives from the World Bank, stated during the training program, “Once you have spent the time to develop
and put the laws into place, then the hard work begins, which is to train the judiciary branch to enforce the laws.” He raised a
valid point in that, if the judiciary won’t enforce the laws, then banks will not accept the risk of making loans, even those offering
good returns. By comparison to the United States, banks in Nigeria pay 5% to 6% on customer deposits. But before you get too
excited, for creditworthy borrowers it is not uncommon in Nigeria to be charged 20% for a term or mortgage loan.
Lending and Traveling in
Lagos, Nigeria - Looking
Beyond the Misconceptions