AI agents for business finance: what they can and can't do
What AI agents can do in bookkeeping, close, collections and compliance today, where a person must stay in charge, and how to judge a product.
The short answer
Nigerian lenders mainly accept land and buildings, vehicles, cash deposits held with them, quoted shares and other investments, and business movable assets such as equipment, stock and receivables. Since the Secured Transactions in Movable Assets Act 2017, movable assets can be registered as security with the National Collateral Registry, which has widened what smaller borrowers can offer. Each type is valued at a discount to its market price, so expect to pledge more than you borrow.
Why lenders ask for collateral
Collateral is property you give the lender a legal right over until the loan is repaid. If you default, the lender can sell it or take it to recover what is owed. The better the collateral, the lower the risk to the lender, which can mean a larger amount or a lower rate. Not all lenders take every type: a commercial bank, a microfinance bank and a licensed finance company each have their own credit policies, and a digital loan app usually takes none at all.
Two ideas run through every type. The first is valuation: what the asset would fetch in a forced sale, not what you paid for it. The second is perfection: the registration or paperwork that makes the lender's right enforceable against you and against anyone else who claims the asset.
The main types at a glance
| Collateral | How the lender takes it | How it is usually valued | Main cost or friction |
|---|---|---|---|
| Land and buildings | Legal mortgage or deed of assignment over the title | Report by a registered estate valuer; forced-sale value | Governor's consent, stamp duty, registration and valuation fees |
| Vehicles | Registration as a security interest; lender may hold original papers | Make, model, age and condition; falls each year | Insurance naming the lender; tracking device on some loans |
| Cash deposits and fixed deposits | Lien on the account | Face value, often lent at a high share of it | Your money stays locked until repayment |
| Quoted shares and investments | Charge or lien noted with the registrar or custodian | Market price with a margin for price swings | Lender may ask for top-up if prices fall |
| Business movable assets | Security interest registered at the National Collateral Registry | Equipment, stock or receivables valued by type and age | Registry search and registration; asset tracking |
| Personal guarantee | A signed guarantee by a third party | The guarantor's income and assets | Places the guarantor at full risk |
Land and buildings
Landed property remains the collateral most banks prefer for large loans. The lender will want a registered title, usually a Certificate of Occupancy or a registered deed, and will commission a valuation. Because a mortgage over land is an alienation of an interest in it, the consent of the state governor is generally required before the lender's interest is perfected. The time and cost of getting that consent are a common reason property-backed loans take weeks. Our guide on land as collateral and governor's consent covers the steps.
Lenders discount property heavily. A house with a market value of ₦60 million might be given a forced-sale value well below that, and the lender will then lend only a share of the forced-sale figure.
Movable assets under the 2017 Act
Before the Secured Transactions in Movable Assets Act 2017, lending against movable property in Nigeria was awkward: lenders had no central place to see whether a machine or a car was already pledged elsewhere. The Act created a framework for taking security over movable assets and a National Collateral Registry where those security interests are recorded and searched. In practice this lets a business borrow against things it already owns and uses.
- Equipment and machinery: generators, production lines, kitchen equipment, medical devices.
- Vehicles: private cars, trucks, buses and tricycles. See using a car as collateral.
- Inventory: stock in a shop or warehouse, valued at a cautious share of cost.
- Receivables: invoices owed to your business by reliable customers.
- Agricultural assets: crops and livestock, where a lender has the experience to value them.
Before you pledge an asset, ask the lender to show you the registry search on it and the registration it will file. If the loan is repaid, ask that the registration be discharged so the asset is free for future use. The explainer on the National Collateral Registry goes through what to ask for.
Deposits, shares and salary
Cash is the easiest collateral to value. A bank that holds your fixed deposit can place a lien on it and lend against it, often at a cost below an unsecured loan, because the money is already in its hands. The trade-off is that you cannot touch those funds until the loan is cleared. See a lien on savings or a fixed deposit.
Quoted shares and some investment holdings can be charged too, but because prices move, lenders apply a margin and can call for more security if the value drops. For salaried workers, many banks rely on a salary domiciliation letter instead of an asset: the employer agrees to pay your salary into the lending bank, which repays itself first.
A worked example (illustrative only)
Suppose a business owner pledges a generator with a market value of ₦8,000,000. The lender's valuer gives a forced-sale value of ₦5,600,000 (70%). Its policy lends 60% of forced-sale value, so the maximum loan against that asset would be ₦3,360,000. The percentages here are examples only; each lender sets its own.
What to check first
- Confirm the lender is licensed: look it up in the CBN's directory of supervised institutions.
- Ask which collateral types its policy accepts for your loan size, in writing.
- Ask for the valuation report and the forced-sale value used.
- Get a written list of all perfection costs (valuation, legal, registration, consent, stamp duty) before you commit.
- Ask how and when the security is released after repayment.
Where Pryme fits
Loans on Spaces work differently: they are lent by Solid Allianze Microfinance Bank, can only be spent with merchants in Spaces, and are offered based on how your account is run rather than against a pledged asset. Any offer shows the full amount, cost and repayment date for you to accept before anything is drawn. See Loans on Spaces.
Questions people ask
Can I use my car as collateral for a loan in Nigeria?
Yes, many banks and finance companies accept vehicles. The lender usually registers its interest, keeps the original papers and requires comprehensive insurance naming it. Older cars are valued low.
What is the National Collateral Registry?
It is the registry set up under the Secured Transactions in Movable Assets Act 2017 where security interests over movable assets are recorded, so lenders can check whether an asset is already pledged.
Can I get a loan with my C of O as collateral?
Banks commonly accept a Certificate of Occupancy, but the mortgage generally needs governor's consent to be perfected, and the lender will commission a valuation. Budget time and fees for both.
Do loan apps ask for collateral?
Most digital lenders in Nigeria do not take physical collateral. They rely on your account and credit history, which is one reason their rates are often higher.
Sources
- PLAC: Secured Transactions in Movable Assets Act 2017 · accessed Oct 2026
- CBN: Supervised financial institutions directory · 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.