Presentation Slides On Borrowers and Lenders Act 2020 (Act 1052)

BANK OF GHANA
PRESENTATION ON THE BORROWERS

AND LENDERS ACT, 2020.
(ACT 1052 )
Collateral Registry Department

Bank of Ghana
Outline of Presentation
• Introduction
• Pre Borrowers and Lenders Act, 2008 (Act 773).
• The era of Act 773
• Challenges regarding implementation of Act 773
• The new Borrowers and Lenders Act, 2020 (Act 1052) and what it generally seeks to
achieve.
• Borrowers and Lenders Act, 2020 (Act 1052) (Arrangement of Sections)

• Application, Creation of Security Interest and Credit Agreements (Sections 1- 4)
• Effectiveness of a security interest between the Lender and Borrower and Collateral
Description (Sections 5-13)
• Effectiveness of a security interest against Third parties (Sections 14-17)
• Collateral Registry, Registration of Security Interest and Searches (Sections 18-32)
Wednesday, June 2, 2021 Collateral Registry Department, Bank Of Ghana 2

Outline of Presentation- Cont’d
Borrowers and Lenders Act, 2020 (Act 1052) (Arrangement of Sections)-Cont’d
• General Priority Rules (Sections 33-40)
• Priority of Transferee of Money, Negotiable Instruments, Security Certificates and

Deposited Securities (Sections 41-43-47)
• Special Priority Provisions for a Lien Arising by Operation of Law (Sections 48-50)
• Rights of Borrower (Sections 51-58)
• Repayment and Recovery of Debt (Sections 59-75)
• Supervisory and Enforcement Role of Bank of Ghana under this Act (Sections 76-82)
• Miscellaneous Provisions (Section 83-88)

Outline of Presentation- Cont’d
Borrowers and Lenders Act, 2020 (Act 1052) (Arrangement of Sections)-Cont’d
• Rules for the Effective Implementation of the Act 1052
• Collateral Registry System Modifications

INTRODUCTION

INTRODUCTION
Prior to the enactment of the Borrowers and lenders Act 2008 (Act 773), there existed
and are still in existence a number of laws which generally relate to the credit
relationship between borrowers and lenders in the country. These include :
The Contracts Act, 1960 (Act 25)
The Mortgage Act, 1972 (NRCD 96)
Home Mortgage Finance Act, 1993 (PNDCL 329)
Hire Purchase Act, 1974 (NRCD 292)
Chattels Transfer Act, 1952 (Act 51)

Finance Lease Act, 1993 ((PNDCL 331)
The Companies Act, 1963 (Act 179) now The Companies Act, 2019 (Act 992)
INTRODUCTION - CONT’D
Notwithstanding, these laws, the legal framework for credit could not adequately motivate
lenders to extend credit facilities especially to Small and Medium Scale Enterprises even
when they could provide collateral.
Further, there were other challenges such as:

• High interest rates.
• Hidden charges.
• Non-disclosure of information in lending

• Lenders preference for immovable property as collateral
• Inability to perfect interest in collateral
• Lack or inadequate information on collateral
• Challenges with judicial enforcement

THE BORROWERS AND LENDER ACT, 2008 (ACT 773)
These challenges encountered by borrowers and lenders therefore necessitated the passage
of the Borrowers and Lenders Act, 2008 (Act 773) to provide a legal framework to address
the identified gaps. Act 773 therefore sets out the following provisions:
Borrowers and lenders rights
Transparency in lending – disclosure of information
Functions of the Collateral Registry
Regulatory and supervisory role of the Bank of Ghana
Secured transactions (collateralized loans)

THE GAPS REGARDING THE APPLICATION OF ACT 773
Although Act 773 introduced significant innovation into Ghana’s credit market, key
provision were absent or inadequate to address the dynamic nature of the credit
landscape. This included:
• Priority of security interests
• Searches
• Effectiveness of security interest against third parties
• Application of proceeds
• Inadequate provisions on enforcement of obligations of the borrower
• The exclusion of some credit transactions
• Issues regarding multiple registrations

THE GAPS IN ACT 773 – cont’d
These identified gaps necessitated the passage of the Borrowers and Lenders Act, 2020
(Act 1052) which repealed Act 773.
As stated in the long title of Act 1052 , the new Act seeks to:
• regulate transactions between Borrowers and Lenders.
• provide for credit agreements generally.
• provide a legal framework for the registration and enforcement of security interests in
collateral.
• establish an order of priority of security interest in collateral.
• establish a Collateral Registry.
Collateral Registry Department, Bank Of Ghana 11

BORROWERS AND LENDERS ACT, 2020.
(ACT 1052)

APPLICATION
General Application- S 2(1) (b) and(c)
• The Act applies to the rights and duties of a borrower or lender before the execution
of a credit agreement.
• The Act further applies to every transaction, act or omission under a credit agreement.

DEFINITION OF BORROWER AND LENDER (Section 85)
 Borrower:
Under the Act, a borrower is defined as a person who enters into a credit agreement with a
lender.
 Lender:
The Act defines a lender as a person who enters into a credit agreement with a borrower. This
includes:
• a person who advances credit
• a person that sells goods on credit
• a person that provides services on credit
• a finance lessor
• a buyer of accounts receivable

Credit Agreement (Section 4)
 Credit Agreement
The Act provides that an agreement is a credit agreement if its provides for or is a combination of a credit
facility, a credit transaction or a credit guarantee.
• Credit Facility- This is a credit agreement in which the lender undertakes to lend stipulated amounts
to a borrower or another person on behalf of the borrower, within a specified period or at specified
intervals agreed on.
• Credit Transaction- A credit transaction includes an agreement that provides for (amongst others) a
pawn transaction, hire purchase agreement, a finance lease, an instalment agreement.
• Credit Guarantee- An agreement provides for a credit guarantee if a third party promises to satisfy on
demand of the lender, the obligations of the borrower.
 A credit agreement is further defined as an agreement that relates to a transaction that creates a security
interest in property to secure the performance of a present or future obligation

RIGHTS OF A BORROWER (SECTIONS 51-59)
Rights of a borrower in accessing credit.

• The Act provides that a person who has a legal capacity to enter into a contract may
apply to a lender for credit - S.51(1)
• A lender may decline credit to a prospective borrower on reasonable commercial

grounds consistent with the customary risk management and underwriting practices of
the lender. (s.51(2))

In accessing credit, a lender shall not discriminate against a potential borrower on the grounds
of gender, race, colour, ethnic origin, political opinion, religion, creed, disability, social or
economic status. (s.52 (1)).
The lender cannot on the basis of any of the factors above-
• refuse an application for credit.
• determine the cost of the credit agreement to the borrower.
• assess the ability of borrower to meet the obligations under a proposed credit agreement .
• or set terms and conditions of a credit agreement.
Where a person is aggrieved by a decision reached by lender which appears contrary to S 52(1),
the person may make a complaint to Bank of Ghana, where such a lender is regulated by the
Bank.

• In addition to the general provisions on discrimination, the Act provides specific

protections against discrimination for persons with disability ( S. 53).
• A lender shall ensure that a person with disability has access to clear , comprehensive,
accurate and accessible information at all stages of credit delivery.
• In accordance with the Persons with Disability Act, 2006 (Act 715) a lender shall provide
the necessary amenities to make credit services available and accessible to persons with
disability.
Collateral Registry Department, Bank Of Ghana 18

Wednesday, June 2, 2021
Pre-agreement disclosure S.57

• Prior to entering a credit agreement with a borrower, the lender is required to provide the
borrower with clear, comprehensive and accurate information regarding a credit agreement
and further inform the borrower of its rights and responsibilities.
• Lenders, regulated by the Bank of Ghana, are required to provide a prospective borrower with
pre-agreement disclosure statement prior to the execution of a credit agreement.
• The pre- agreement disclosure statement shall include amongst others, the principal amount,
disbursement schedule, the interest rate, the proposed repayment schedule, insurance for the
loan and the total amount involved in the credit agreement.
• Any charges or fees not disclosed in a pre-agreement disclosure statement by a lender shall not
be payable by the borrower and if already paid shall be refunded with interest.

Interest Rates- S.55(3)

Under a Credit Agreement, a lender is required to only impose on a borrower interest rate that
are calculated on an annual basis.
Where a credit agreement provides for the application of penal interest rate on delayed
repayments of the principal amount or interest on the principal ,the penal rate shall only be
applicable to the delayed payment only and not the total amount of the outstanding loan.
Account Statements-S.58
Upon a request by a borrower, a lender shall not later than five days, provide a statement
capturing the status of a loan including any payment made together with balances outstanding,
fees and interest.

Confidentiality -S56
A lender in entering into a credit agreement shall not disclose information obtained from a
borrower to another person, unless required
• under Act 1052
• under any other law
• by a court of competent jurisdiction
or
• where the borrowers consent has been obtained.

Other Rights of a Borrower - S 55

Where a borrower exercises its rights under this Act the lender is prohibited from
(amongst others)-
• penalising the borrower.
• altering the terms or conditions of a credit agreement to the detriment of the borrower.
• taking steps to accelerate, enforce, suspend or terminate a credit agreement

APPLICATION AND CREATION OF SECURITY INTEREST IN
COLLATERAL

APPLICATION, CREATION OF SECURITY INTEREST AND
CREDIT AGREEMENT.
Definition Of Security Interest- S85

• A security interest in collateral is a proprietary right in a movable or immovable asset.
• It is created by an agreement to secure payment or the performance of an obligation
regardless of the form which the agreement may take. For eg. fixed or floating charge, a
mortgage , a finance lease, a pledge, a charge on chattels etc.
• The payment or performance of an obligation is secured by a borrower or third party (who
has title to the collateral) creating a security interest in collateral in favour of a lender.

APPLICATION AND CREATION OF SECURITY INTEREST
Application of the Act with respect to security interest-S. 1(1)

In respect of Security Interest, the Act applies to ( amongst others) :
• A credit agreement that provides for a security interest in property.
• The creation of a security interest, the effectiveness of that security interest against third
parties and priority of that security interest in tangible/intangible property that is located
in Ghana.
• Issues relating to the enforcement of a security interest in tangible/ intangible property.

Further provision on application- S. 2

The Act applies to credit agreements whether or not the lender or borrower:
• resides or has a principal office within Ghana
• is an institution that belongs to the state
• is an entity controlled by an institution that belongs to the State or
• is an entity created by an enactment.

Exception to the Act Application S. 1(3)

The Act does not apply ( amongst others) to a security interest in-
• ships as defined in section 481 of the Ghana Shipping Act, 2003, (Act 645); or an aircraft as defined in
the Aircraft Accident and Serious Incident Regulations, 2019 (L.I, 2375).
• payment rights arising under or from financial contracts governed by netting agreements as determined
by Bank of Ghana.
• assignment of wages and salaries, pension and other similar benefits as provided in the National
Pensions Act, 2008 (Act 766) and other applicable legislation.
• a contract of annuity or life insurance policy.
• deposited securities as defined in section 60 of the Central Securities Depository Act, 2007 (Act 733).
• credit agreement where the loan amount advanced by the lender ( supervised by the Bank)is less than
GHS 500.

EFFECTIVENESS OF A SECURITY INTEREST BETWEEN THE
LENDER AND BORROWER AND COLLATERAL DESCRIPTION
(SECTIONS 5 – 13)
Form of credit agreement- S.5 &6
 A credit agreement that creates a security interest in property shall be executed in writing
and this credit agreement shall consist of one or more tangible documents or electronic
records which when taken together establishes the intent of the parties.
 A credit agreement that creates a security interest in property shall identify-
• the lender
• the borrower
• the collateral
• the secured obligation

EFFECTIVENESS OF A SECURITY INTEREST BETWEEN THE
LENDER AND BORROWER AND COLLATERAL DESCRIPTION
(CONT’D)
Sufficient description of property and secured obligations S. 8 – 9
• A credit agreement is required to provide a reasonable description of the property to be used as

collateral. The description may be generic or specific.
• Nonetheless, in the case of an immovable property, the description of collateral is required be a

specific and include location, size and geographical coordinates.
• In respect of secured obligations under a credit agreement, it is sufficient to describe same

generically including by a reference to all payment obligations for which a security interest may
be enforced.

EFFECTIVENESS OF SECURITY INTEREST AGAINST THIRD
PARTIES
Third party effectiveness -S. 14- S15
• A security interest that has been created and registered in accordance with this Act is
made effective against a third party.
• A registered security interest shall continue to be effective against a third party for as
long as the registration of the security interest has not been discharged.

Security interest with respect to proceeds- S 15 -S16
• Unless authorised by the lender, a security interest made effective under the Act shall
continue where the collateral has been disposed off and extend to the proceeds.
• Generally, a security interest may include proceeds from a collateral. In such an

instance, the proceeds must be of a kind that is within the description of the collateral in
the registration or are cash proceeds.
• The proceeds shall continue to be effective against third parties where the security
interest in the original collateral has by registration been made effective against third
parties.

COLLATERAL REGISTRY, REGISTRATION OF SECURITY
INTEREST AND SEARCHES (Sections 18-32)
Collateral Registry- S.18 & 19
Pivotal to the legal framework on secured transactions (i.e Collaterised Lending) is the
function of the Collateral Registry.
In line with this, the Act provides for the establishment of the Collateral Registry at the
Bank of Ghana. The Registry is headed by a Registrar appointed by the Bank who is
responsible for the performance of the functions of the Registry.
The functions of the Registry are to:
• To register security interest in collateral.
• To keep and maintain a Register of security interest in collateral.
• To keep and maintain a platform for the conduct of searches in security interest in
collateral.
• To perform any other function determined by the Bank of Ghana.

COLLATERAL REGISTRY AND REGISTRATION OF SECURITY
INTERESTS (CONT’D)
Registration of Security Interest at the Collateral Registry- S.22
• To achieve third party effectiveness , a lender in whose favour a security interest is created
shall register same at the Collateral Registry within 28 days after the date of creation.
• In order to register, the lender requires the written consent of the borrower; which consent is
deemed to have been given by upon the execution of a credit agreement- S.27.
• The security interest in property shall not operate as a transfer of title in the property from the
borrower to the lender.- S7
• Lenders, subject to the supervision of the Bank, that fail to register security interest within the
stipulated time period of 28 days are liable to pay to the Bank an administrative penalty of ten
penalty units for each day that the breach continues.

 Particulars of a Registration -S. 23 & 24
A registration of a security interest in collateral shall specify the following:
• The identifier of the borrower and lender as prescribed by the Registry Rules
• Description of the collateral
• Loan tenure
• Maximum amount secured by the interest.
 Effectiveness of a registration- S.25
• A registration is deemed effective from the date and time it is acknowledged by the Registry and is entered
into the Register and shall remain effective until discharged by the Registrant.
 Grounds for refusal
• The Registrar may decline a registration where the information is not submitted by the registrant in the
prescribed form or the prescribed fee has not been paid .

Security Interest between the borrower and lender S.6(1)
Notwithstanding S.22 (1) of the Act requiring a registration of security in collateral, a
security interest created by a credit agreement is EFFECTIVE between the borrower and
the lender without registration EXCEPT that without registration a security interest
cannot be effective against third parties.
Further, the right to enforce an unregistered security interest in collateral is subject to

the rights of any other lender or person entitled to priority under the Act.

Registration under other enactments- S17
• The registration of a security interest in collateral under the Act does not preclude
requirements for registration under other enactments.
• However, for security interest to be effective against third parties lenders are required to
additionally register under Act 1052.

Amendment of a Registration – S29
 A registration may be amended by a registrant to reflect changes to a credit agreement. For
example an amendment may include the addition of collateral or a new borrower.
 Additionally, a registrant shall amend a registration where-
• a borrower and lender have agreed to change the maximum amount secured by the security
interest.
• the collateral described in the registration includes property that is not collateral under a
credit agreement between the lender and the borrower.
 Where required a borrower may apply to court for an order to compel a lender to amend a
registration
37
Wednesday, June 2, 2021 Collateral Registry Department, Bank Of Ghana
Amendment of a Registration – S29
An amendment to a registration is effective and has priority from the date of registration of the
amendment where the amendment-
• adds collateral other than proceeds;
• adds a new borrower,
• modifies the maximum amount secured by the security interest.
38
INTERESTS.
Discharge of Registration- S 30
 A lender shall discharge or cause the discharge of a registration where (amongst others)-
• the obligations under a credit agreement have been performed.
• the lender consents to the release of whole or part of the security interest.
• the lender has realized the security interest in the collateral.
• the lender in realizing the security interest has retained the collateral.
 A lender is required to effect a discharge within five days of the occurrence of any of the events
above.
 A lender subject to the supervision of the Bank who fails to discharge a registration where
required is liable to pay to the Bank an administrative penalty of 1500 penalty units.

INTERESTS
Searches- S.32
• To facilitate access to information on collateral for prospective lenders and interested
persons the Register is available for searches by the general public.
• A person may without having to provide reasons, conduct a search on the Register among
others in accordance with this Act and in a manner prescribed in the Registry Rules.
• The search results issued by the Registry is evidence of the existence or absence of the
registration on the Register at the time the result was issued and is admissible as evidence in
court proceedings.
• A person that uses search results issued by the Registry to malign, cause wilful injury or
unwarranted damage to another person commits an offence and is liable upon summary
conviction to a fine or term of imprisonment of not less than two years and not more than
five years.

PRIORITY OF REGISTRATION
• The Borrowers and Lenders Act fosters access to multiple sources of credit for a Borrower.
• A single asset/ property can be used by a borrower to access multiple sources of credit from
multiple creditors.
• Lenders need not ‘tie-up’ collateral to secure their interest.
• By virtue of a registration, a prior lender’s interest in the collateral is secured. Subsequent

lenders can lend on the same collateral and secure their interest by registration. Thereby
establishing an order of priority.
• In the event of a default by a borrower, all lenders are protected and can recover losses from
the proceeds of the sale of collateral.

Priority of registration – S34

The principal rule in establishing priority of registration is that a lender who registers
a notice of its security interest first, will have priority over any other subsequently
registered notices of security interests in the same collateral.
Unless otherwise provided in the Act, priority between security interest in the same
collateral shall be determined by the order of their registration
Despite this principal rule , the Act provides for other specialised rules on establishing
the order of priority of registrations of security interest.

The specialised rules which factor into the determination of the order of priority
include (amongst others):
• Priority of purchase money security interest
• Priority of security interest in accession and commingled goods
• Priority of transferee of money, funds, negotiable instruments, security certificate
etc.
• Possessory lien with respect to movable and immovable property.
• Priority Rules related to interests in immovable property and fixtures.

Priority with respect to transferred Collateral- S 40
Where a borrower transfers an interest in collateral that is registered under this Act to
a third party. The security interest of the lender registered under this Act shall have
priority over any interest acquired by the third party.

Subordination of priority interest- S36
Regardless of the consent or otherwise of a borrower, a lender may subordinate its priority,
established in accordance with this Act , in favour of another lender who has a security interest
in the same collateral.
Such an agreement reached to subordinate a lender’s priority interest shall not be to the
detriment of the rights of a person who is not a party to the agreement.

Priority rules in relation to other enactments.
Priority of registration
Irrespective of the time of registration, a security interest registered under this Act shall have
priority over any other security interest in same property registered under another enactment-
S.33
Priority of mortgages
In respect of mortgages, security interest in an immovable property in form of mortgage
registered under the Act has priority over a mortgage registered under the Home Mortgage
Finance Act, 2008(Act 770) or the Mortgages Act, 1972(NRCD 96)- S.45

REPAYMENT AND RECOVERY OF DEBTS (Sections 59-75)
S. 59 A borrower may settle the credit amount at any time, subject to notice requirements
and the conditions provided for in the credit agreement and that unless otherwise agreed by
the parties, the amount required to be paid shall be the total of:
The principal amount
The accrued interest charges
A prepayment charge, if any
Other fees and charges payable by the borrower.

S. 60 In the event of a default, a lender shall give a notice of the default to the borrower
in writing and request the borrower to pay the amount due within thirty days after the
date of receipt of the notice.
Where the goods are perishable, the period of notice i.e. thirty days shall not apply. The
lender shall give a notice of the default to the borrower in writing and request the
borrower to pay the amount due immediately after the date of receipt of the notice.

S60
 The mode of delivery of the notice by the lender shall be by:
• hand personally;
• courier service;
• registered mail; or
• other means agreed upon by the lender and the borrower in a credit agreement.
 A lender may publish a notice of default in two daily newspapers of national

circulation where three consecutive attempts at service as referred to above fails.

S.61 -Where a borrower fails to pay the amount outstanding or make satisfactory arrangements
to pay the outstanding amount to the lender, the lender may in order to enforce his rights:
• sue the borrower on any covenant to perform under the credit agreement;
• where registered under this Act, realise the security interest in the collateral without
initiating proceedings in court or seeking the courts sanctioning to enforce rights of
possession.
• appoint a Receiver or Manager in accordance with a credit agreement or an order from

the court
50
S.62 – Realisation without Court Order

Where a lender elects to realise a security interest without initiating court proceedings, the lender shall
register a notice of that intention with the Registry.
Upon meeting all the requirements under the Act and the Registry Rules, the Registry shall issue a
certificate known as a ‘ Memorandum of No Objection’ . The Memorandum of No Objection certifies
the realisation process.
The ‘Memorandum of No Objection’issued to a lender remains valid until

• the collateral is sold or retained by the lender or
• the debt is settled and the collateral has been redeemed
51
• Right to Possession-S.63
Once the lender has obtained a Memorandum of No Objection the lender may proceed to
take possession of the collateral or render the collateral unusable without removal.
• Warrant for police assistance- S64

Where a lender is unable to recover possession of a collateral in a peaceable manner, the
lender may upon warrant issued by a court use the services of the police to recover
possession of the collateral.

S 64 (2)Application for a Warrant

 An application for a warrant shall be on notice to the borrower and borrower may
within eight days of receipt of the notice object to the application on the following
grounds :
• the full amount of the debt has been paid
• the default has been cured or
• the default has not occurred.
 A court is mandated to issue a warrant if eight days after the service of notice, the
borrower does not file an objection to an application for a warrant.

 S 64 (4) Continued Obstruction
A person who continues to obstruct a lender’s right of possession to collateral after a

warrant is obtained is deemed to have committed an offence and is liable to a fine of 500
penalty units and in the case of a continuing offence , to a further fine of 50 penalty units
for each day the offence continues.

 Realisation-S.66
A lender shall realize the collateral either by auction, public tender, private sale. The price at
which a collateral is sold shall be determined by an independent valuer appointed by the lender.
Pursuant to the sale of the collateral, a transfer of legal title to a purchaser may be confirmed by
a court.
 Notice of Sale of Collateral- S.67
Not less than 7 days before the sale of collateral , a lender shall give a notice in writing to the
following:
• the borrower and the debtor.
• a person who has a registered security interest in respect of the same collateral.
• a person that has given the lender notice that the person claims an interest in the collateral
before the lender took possession.

Accounting for Sale-S.69

Where the collateral is sold, the lender shall prepare a statement of account for the persons
referred to in S.67(1)
Distribution of proceeds-S. 70
Before applying the net proceeds of the sale towards the satisfaction of the debt, the proceeds
from the sale of the collateral shall be applied by the lender in the following order:
• The reasonable cost and expenses of the sale
• Reasonable legal expenses
• The satisfaction of the debt of any prior interest registered under the Act.

Retention of Collateral after default -S. 71 & 72.

A lender who has priority over all other lenders may propose to retain the collateral in
full or partial satisfaction of the debt.
Right to Settle Debt and Redeem Collateral-S. 73

Similarly a person entitled to receipt of notice under S. 67(1) may at any time before
lender sells the collateral, settle the debt and redeem the collateral

Surplus- S70 (2)

• Surplus from the proceeds of sale of collateral shall be paid to person who has a
subordinate security interest or any other person that claims interest in the collateral
upon an order of court in respect of the surplus.
• Pending an order from a court in respect of proceeds, surplus from the proceeds of
sale of collateral shall be paid into a designated escrow account agreed by the parties
who may have subordinate security interest.
• Any remaining surplus shall be paid to the borrower after all required payments have
been made.

SUPERVISORY AND ENFORCEMENT ROLE OF THE BANK
OF GHANA UNDER THIS ACT SECTIONS 76-82.
Functions of the Bank
In furtherance of this Act, the Bank is mandated to (amongst others):
• Promote and support the development of a fair, transparent, competitive and accessible credit
market.
• Collaborate with the Lands Commission, DVLA ,Office of the Registrar of Companies and
other relevant Registries for the purpose of the effective implementation of the Act.
• Receive complaints for the general public on alleged contraventions of the Act
• Monitor the credit market to detect and prevent conduct prohibited under the Act.
• Promote public awareness on credit matters.
• Investigate suspected offences under this Act.
• Impose administrative sanctions for infringements under this Act.

MISCELLANEOUS PROVISION (SECTIONS 83-88).
S. 86 Conflict of laws
Where there is a conflict between this Act and any other enactment, regarding the
creation, perfection, effectiveness of security interest against a third party, enforcement
and priority, the provisions of this Act shall supersede the provisions of that enactment.
S. 87 Transitional Provisions
On transitional provisions, the Act states that prior law shall apply to a matter that is the
subject of proceedings prior to the entry into force of this Act. This is also applicable to
the enforcement of security interest prior to the coming into effect of this Act.

MISCELLANEOUS PROVISION (SECTIONS 83-88).
S. 88 Repeal and savings

The coming into force of this Act repeals the Borrowers and Lenders Act, 2008 (Act 773).
Notwithstanding the repeal, all acts made or done under Act 773 continue to be in force
until amended or revoked in accordance with this Act.

END OF PRESENTATION
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BANK OF GHANA

PRESENTATION ON THE BORROWERS

Collateral Registry Department

• Borrowers and Lenders Act, 2020 (Act 1052) (Arrangement of Sections)

Wednesday, June 2, 2021 Collateral Registry Department, Bank Of Ghana 2

• General Priority Rules (Sections 33-40)

• Priority of Transferee of Money, Negotiable Instruments, Security Certificates and

• Rights of Borrower (Sections 51-58)

• Repayment and Recovery of Debt (Sections 59-75)

• Miscellaneous Provisions (Section 83-88)

• Rules for the Effective Implementation of the Act 1052

• Collateral Registry System Modifications

Wednesday, June 2, 2021 Collateral Registry Department, Bank Of Ghana 4

Wednesday, June 2, 2021 Collateral Registry Department, Bank Of Ghana 5

The Mortgage Act, 1972 (NRCD 96)

Home Mortgage Finance Act, 1993 (PNDCL 329)

Hire Purchase Act, 1974 (NRCD 292)

Chattels Transfer Act, 1952 (Act 51)

Further, there were other challenges such as:

Wednesday, June 2, 2021 Collateral Registry Department, Bank Of Ghana 7

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Borrowers and lenders rights

Transparency in lending – disclosure of information

Functions of the Collateral Registry

Regulatory and supervisory role of the Bank of Ghana

Secured transactions (collateralized loans)

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Collateral Registry Department, Bank Of Ghana 11

Wednesday, June 2, 2021 Collateral Registry Department, Bank Of Ghana 12

General Application- S 2(1) (b) and(c)

Wednesday, June 2, 2021 Collateral Registry Department, Bank Of Ghana 13

Wednesday, June 2, 2021 Collateral Registry Department, Bank Of Ghana 14

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Rights of a borrower in accessing credit.

• A lender may decline credit to a prospective borrower on reasonable commercial

Wednesday, June 2, 2021 Collateral Registry Department, Bank Of Ghana 16

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• In addition to the general provisions on discrimination, the Act provides specific

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Pre-agreement disclosure S.57

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Interest Rates- S.55(3)

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Other Rights of a Borrower - S 55

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Definition Of Security Interest- S85

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Application of the Act with respect to security interest-S. 1(1)

• Issues relating to the enforcement of a security interest in tangible/ intangible property.

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Further provision on application- S. 2

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Exception to the Act Application S. 1(3)

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Sufficient description of property and secured obligations S. 8 – 9

• A credit agreement is required to provide a reasonable description of the property to be used as

• Nonetheless, in the case of an immovable property, the description of collateral is required be a

• In respect of secured obligations under a credit agreement, it is sufficient to describe same

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Third party effectiveness -S. 14- S15