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Getting Credit in

Nigeria - Lagos

Below is a detailed summary of two sets of issues—the strength of credit reporting systems and the effectiveness of collateral and bankruptcy laws in facilitating lending.

This information was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 190 economies. The most recent round of data collection was completed in June 2016.

Compare Nigeria - Lagos to 189 other economies.

Strength of legal rights index (0-12)  
Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents to security interests in movable assets exist in the economy? No
Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description of collateral? Yes
Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of collateral? Yes
May a security right extend to future or after-acquired assets, and may it extend automatically to the products, proceeds or replacements of the original assets? Yes
Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Yes
Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an electronic database indexed by debtor's name? Yes
Does a notice-based collateral registry exist in which all functional equivalents can be registered? No
Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third party? No
Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes
Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? No
Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court-supervised reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? No
Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell the collateral through public auction and private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Yes
Score (number of "yes" responses) 7
Depth of credit information index (0-8) Credit bureau Credit registry Score
Are data on both firms and individuals distributed? Yes No 1
Are both positive and negative credit data distributed? Yes No 1
Are data from retailers or utility companies - in addition to data from banks and financial institutions - distributed? Yes No 1
Are at least 2 years of historical data distributed? (Credit bureaus and registries that erase data on defaults as soon as they are repaid or distribute negative information more than 10 years after defaults are repaid receive a score of 0 for this component.) Yes No 1
Are data on loan amounts below 1% of income per capita distributed? Yes No 1
By law, do borrowers have the right to access their data in the credit bureau or credit registry? No No 0
Can banks and financial institutions access borrowers’ credit information online (for example, through an online platform, a system-to-system connection or both)? Yes No 1
Are bureau or registry credit scores offered as a value-added service to help banks and financial institutions assess the creditworthiness of borrowers? No No 0
Score ("yes" to either public bureau or private registry) 6
Coverage Credit bureau Credit registry
Number of individuals 6,498,344 0
Number of firms 996,294 0
Total 7,494,638 120,750
Percentage of adult population 7.7 0.1