LEGAL FRAMEWORK FOR THE ENFORCEMENT OF SECURED CREDIT TRANSACTIONS IN NIGERIA, GHANA, INDIA AND UNITED STATES

Abstract

Secured credit transactions are crucial for economic growth as they enable greater availability of credit that expands modern business and economic prosperity. Secured credit transactions simply involve financial obligations secured by collaterals until repaid. They further involve steps that the secured creditor can take to enforce repayment of the obligation after the due date and how the law regulates them. To this aim, this article undertook a comparative analysis of the legal framework for the enforcement of secured credit transactions in Nigeria, Ghana, India and United States; in order to identify and draw useful lessons for advancement of the Nigerian secured credit system. Doctrinally, books, statutes, journal articles, newspapers, and other useful materials were sourced virtually and traditionally. Key statutes included the Secured Transaction in Movable Assets Act, Companies and Allied Matters Act, Borrowers and Lenders Act of Ghana, Transfer of Property Act of India and the Uniform Commercial Code of the United States. Amongst several findings, the STMA aims to unify and modernise the framework for movable assets but falls short in some ways compared to those statutes. The areas include delay caused by statutory notices, uncertainty over breach of peace and litigation risk. The article found further that the mortgage systems still gains prominence in Nigeria but also suffers delay during enforcement and sometimes denial due to condition precedents such as governor’s consent, multiple registration requirements, imperfect creation and strict interpretation amongst others. The article concludes that a secured credit system is functional where its mode of creation is simple and uniform, has predictable timelines for perfection and ability to enforce the security out-of-court and without delay. Therefore, this article recommends review of the STMA for unification of movable and immovable assets, establishment of a single collateral registry, specialised debt recovery tribunals and contract-based system of enforcement.