In a major move to enhance financial inclusion and ease access to credit, the Bank of Sierra Leone (BSL) has on Friday March 14, 2025 relaunched its Collateral Registry campaign. The initiative, which aims to simplify loan acquisition for individuals and businesses, was unveiled at the Sam Bangura Building in Freetown.

The 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 use of collateral in securing loans. It allows lenders to register and search for existing collateral, ensuring transparency and priority in loan security. Borrowers can now leverage both movable and immovable assets to obtain credit, thereby expanding financial opportunities.

Philip Bangura, Assistant Director of the Banking Supervision Department at BSL, highlighted the transformative impact of the registry on 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 stated.

Previously, banks primarily accepted immovable assets like land and buildings as collateral, which excluded many small business owners and individuals without such assets. The updated registry now allows movable property, often the most valuable capital for Small and Medium-Sized Enterprises (SMEs), to serve as collateral, significantly broadening access to credit for entrepreneurs and self-employed individuals.

“This system was created to support those who may not have formal employment or a steady salary,” Philip Bangura explained. “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.”

Beyond easing loan access, the BSL is committed to promoting financial inclusion, particularly for women and individuals with disabilities. Philip Bangura emphasized that the registry is part of a broader strategy to foster a culture of savings and 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 noted.

The Collateral Registry also addresses past challenges in Sierra Leone’s banking sector. Before its implementation, banks operated in isolation, allowing borrowers to default on loans with one institution while securing new loans elsewhere. The registry introduces a shared database, requiring banks to check a borrower’s credit report before approving any new loans.

“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,” Philip Bangura explained. “If a borrower has an outstanding default, they will be required to clear it before accessing any new loans.”

To prevent abuse of the system, the BSL has introduced strict measures against defaulters. Those who default on loans will be blocked from accessing new credit until their debts are settled. Additionally, individuals 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,” Philip Bangura warned.

To complement the Collateral Registry, the BSL announced plans to launch a nationwide financial literacy campaign during Financial Week. This initiative will target schools, markets and social institutions to educate the public 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,” Philip Bangura stated.

As the Bank of Sierra Leone continues its push for greater financial literacy and access to credit, the enhanced Collateral Registry stands as a crucial tool in empowering individuals and businesses, fostering economic growth and strengthening Sierra Leone’s financial future.