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The short answer
The Secured Transactions in Movable Assets Act 2017 lets you use movable property such as equipment, vehicles, stock and receivables as security while you keep using it, and lets the lender record its claim on the CBN's National Collateral Registry so others can see it. If you default, the agreement and the Act give the lender a route to enforce against that collateral, so the security agreement and the description of collateral are the parts to read most closely. When the loan is repaid, ask the lender to discharge the registration.
What the Act is for
For years, small businesses in Nigeria struggled to borrow because banks wanted land or buildings as security, and most traders, artisans and farmers do not have title documents to offer. Their valuable assets are movable: a delivery van, a sewing machine line, a cold room, inventory, crops, money owed by customers. The Secured Transactions in Movable Assets Act 2017 (often called the STMA) gives a legal framework for using those assets as collateral.
The National Collateral Registry, run by the CBN with support from the IFC, describes itself as the system that operationalises the Act. Its stated aim is improving access to finance, particularly for MSMEs, by letting borrowers pledge movable assets that remain in their possession.
What a lender can take security over
- Equipment and machinery used in a business.
- Vehicles, tricycles and motorcycles.
- Inventory and stock, including stock that changes as you buy and sell.
- Receivables, such as invoices owed to you by customers.
- Other movable property described in the security agreement.
Read the collateral description. A security agreement that describes 'all present and future assets' covers far more than one that names a specific generator by serial number. If you are pledging one item, ask for the description to be limited to that item.
Registration and priority
A lender perfects its claim against third parties by filing a financing statement on the National Collateral Registry. The NCR says each accepted filing gets a sequential registration number and a date and time stamp, and priority between competing security interests follows the time of registration. In practice, if two lenders claim the same asset, the one that registered first usually ranks first.
This has two consequences for you as a borrower:
- Once registered, anyone can see the claim. A buyer, another lender or a landlord can search the registry by your BVN, your business name or the asset's serial number. See how to search the National Collateral Registry.
- Pledging the same asset to a second lender without telling them is risky. The second lender will find the first registration, and the agreement may treat a second pledge as a default.
The NCR home page also says that under the Collateral Registry Regulations 2015 only a bank or other financial institution licensed by the CBN under the Banks and Other Financial Institutions Act can take a security interest on the registry. If a lender that is not CBN-licensed says it has 'registered your asset', ask what it means.
What happens if you default
The security agreement will set out when the lender can enforce. Enforcement against movable collateral can involve the lender taking possession of the asset and selling it to recover what is owed, within the rules in the Act and the agreement. Key points to check before you sign:
- What counts as default: one missed payment, a set number of days late, or other breaches such as selling the asset.
- Whether the lender must give you notice before taking the asset, and how much.
- How any sale is carried out and how the proceeds are applied, including what happens to any surplus once the debt and costs are paid.
- Whether you remain liable for any shortfall if the sale does not cover the debt.
Our guide on how a lender repossesses collateral covers the process, and types of collateral lenders accept compares options.
Worked example: what pledged stock covers
Example only. A provisions trader borrows ₦1,500,000 and pledges 'all inventory at the shop' as security. At signing the stock is worth ₦2,200,000. Six months later, after normal trading, the stock is worth ₦1,800,000 but it is mostly new goods bought since signing. Because the description says 'all inventory', the security usually follows the stock as it turns over; the lender's cover is now ₦1,800,000 against whatever balance remains. If the description had named only goods in a specific delivery, the cover would shrink as those goods were sold.
After repayment
- Get written confirmation that the loan is fully repaid.
- Ask the lender to discharge the financing statement on the NCR and send you proof.
- Run a search by your BVN or business name to confirm it no longer shows as live.
- Keep the confirmation with your settlement letter.
If you are a sole trader, remember that a search by your BVN will show security interests you granted personally, while one by your business registration number shows those granted by the business. Check both.
Where Pryme fits
A business in a supported sector with a Pryme Business Account can join Spaces and accept customers paying with Loans on Spaces, which are lent by Solid Allianze Microfinance Bank. See Spaces for business.
Questions people ask
What is the Secured Transactions in Movable Assets Act 2017?
It is the Nigerian law that lets borrowers use movable assets such as equipment, vehicles, stock and receivables as loan security, with claims recorded on the National Collateral Registry.
Can I keep using equipment I pledged as collateral?
Usually yes. The point of the Act is that movable collateral can stay in your possession, subject to the terms of your security agreement.
Can a lender seize my equipment if I default?
The security agreement and the Act give the lender a route to enforce against the collateral. Check the default, notice and sale terms before signing.
How do I remove a collateral registration after repaying?
Ask the lender to discharge the financing statement on the NCR, then search the registry to confirm.
Sources
- National Collateral Registry Nigeria (CBN): home and search page · accessed Oct 2026
- National Collateral Registry Nigeria: How To guide (search, payment, financing statements) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.