From my compliance and lending expertise at GCB Bank, secured finance is key to mitigating risks under Act 930 and Basel principles, especially post-2019 recapitalization. Examples draw from Ghanaian agribusiness loans secured by land or inventory.

(a) Types of Assets Used by Borrowers as Security

Assets are classified as tangible/intangible, movable/immovable, per the Borrowers and Lenders Act, 2020:

• Real Property (Immovable): Land, buildings (e.g., mortgages on factories). Common in Ghana for long-term loans; requires Lands Commission registration. Example: Cocoa processors secure loans with warehouses.
• Movable Tangible Assets: Vehicles, machinery, inventory. Registered at Collateral Registry; floating charges allow business continuity. In oil & gas, equipment pledges support project finance.
• Intangible Assets: Receivables, intellectual property (e.g., patents), shares. Assignments or pledges; vital for tech firms in Ghana’s digital economy per Act 987.
• Financial Assets: Bank deposits, bonds. Easily liquidated; used in overdrafts. During DDEP, government bonds as collateral faced haircuts, highlighting risks.
• Personal Guarantees: Not assets but often combined; directors’ assets back corporate loans.

These integrate with international standards like UCP for trade-related security.

(b) Considerations by the Lender in Accepting Assets as Security

Lenders evaluate per BoG’s Credit Risk Management Guidelines:

• Valuation and Liquidity: Independent appraisal for market value; liquid assets preferred to ensure quick realization. Example: Illiquid rural land rejected post-2017 cleanup to avoid NPLs.
• Legal Perfection: Ensure registrable (e.g., at Companies Registry for charges under Companies Act, 2019 (Act 992)). Cross-border: Check conflicts of law per Rome Convention.
• Risk Assessment: Depreciation, market volatility (e.g., commodity prices for inventory). Insurance mandatory; environmental due diligence for sustainable banking.
• Borrower Title and Encumbrances: Title searches to confirm ownership, no prior charges. In Ghana, BoG mandates CRB checks.
• Enforceability and Costs: Ease of enforcement under Act 930; costs vs. loan value. Practical: During UT Bank liquidation, poor collateral led to losses; now, banks like Barclays’ Ghana arm use legal opinions.
• Regulatory Compliance: BoG approval for large exposures; align with Capital Requirements Directive.

Marks: (a) 15 marks for types with examples; (b) 15 marks for considerations.