The Ethiopia Movable Collateral Registry (EMCR) is a national online database for the registration and searching of movable property security rights in Ethiopia.

It is an online system that allows secured creditors (lenders) to register their movable assets and use those assets as collateral when seeking loans. Through the EMCR, lenders can register a security right in movable property 24/7, helping to improve the credit decision making on credit facilities for assessment and management of debtor risk.

The Collateral Registry makes it possible for borrowers who do not own land or buildings to be able to access a loan, using their movable assets – for example machinery, equipment, livestock, crops or inventories and receivables - as collateral.

The Collateral Registry’s main purpose is to make it possible for lenders to register a security right over movable property/collateral(s).

It also:

• Establishes priority of lenders according to the time of registration.
• Provides information on the existing securities as they relate to specific movable property.
• Creates the ability to search the database of the Registry to ascertain if there are prior security rights in existing collateral; and
• Improves significantly the mechanism for enforcing credit agreements.

The Collateral Registry is important because it is a publicly available database that allows lenders to better assess the status of the loan applicant’s assets and its potential priority as against other lenders.

For instance, before taking a security right in the equipment the borrower offers as collateral, the lender searches the Collateral Registry to make sure no other lender already registered a security right in that collateral. Regardless, a borrower may offer their property as collateral to multiple secured creditors who will decide whether the property has sufficient value to secure all the loans.

The Collateral Registry makes it much easier for small businesses, entrepreneurs and farmers who do not own buildings or land to secure loans. These loans will help many small businesses grow, which will support job creation and broader economic expansion in Ethiopia.

The Collateral Registry maintains a record of lenders’ security rights in debtor’s movable assets. This allows banks, microfinance institutions, and other lenders to make informed lending decisions, encouraging more lending and reducing risk.

The Registry is an online system that allows any creditor to submit a notice on their rights to a debtor’s assets, as long as the latter provides written consent. The Registry is maintained by the National Bank of Ethiopia.

A security right is created by an agreement between the debtor and creditor, referred to as a ‘security agreement’. The security agreement should reflect the parties’ intention to create a security right and should adequately describe the collateral (movable property) and the parties. A security right created in respect of collateral is only effective if a security agreement contains adequate description of the collateral (item, kind, type or category etc.).

Collateral is defined as movable assets/properties that is subject to a security right. This includes machinery, equipment, livestock, crops or inventories and receivables. Any movable asset can be registered, but different lenders may accept different types of movable collateral.

• Lending institutions such as banks, microfinance institutions and any financial institutions providing loans.
• Individuals who are about to purchase personal property such as valuable second-hand goods to confirm that the property is free from competing security rights.
• Businesses that sell personal property on credit, consignment, or on a title retention arrangement.

You can access the Collateral Registry online at <a href="https://www.emcr.nbe.gov.et">www.emcr.nbe.gov.et</a> where you can do a public search.