The Governor of the Central Bank of the Republic of Somaliland, Abdinasir Ahmed Hirsi, has announced that the country’s newly introduced online collateral registration system will significantly strengthen the protection of banks’ legal rights by preventing fraudulent practices involving pledged assets.
Speaking during the inauguration of Bank Collateral Registration Offices at the Regional Courts of Appeal across Somaliland, the Governor said the digital registry will allow financial institutions and relevant authorities to instantly verify whether a property has already been pledged as collateral and identify the lending bank.
According to Governor Abdinasir, the system addresses a long-standing loophole that has exposed banks to financial and legal risks.
He explained that some borrowers have previously claimed that title deeds for properties pledged to banks had been lost before approaching local government authorities to obtain replacement ownership documents. Such actions, he said, have often resulted in disputes over property ownership and threatened the legal security of banks’ collateral.
“Sometimes, a property that has been pledged to a bank is taken to the local government, where the owner claims the title deed has been lost and requests a replacement. The online registration system we are introducing will prevent this by making it easy to verify whether a property has been pledged as collateral and identify the bank to which it is pledged,” Governor Abdinasir Ahmed Hirsi said.
The Governor noted that the new digital registry will improve transparency within Somaliland’s financial sector, reduce opportunities for fraud, and enhance confidence in the banking system by safeguarding lenders’ security interests.
The launch of the Bank Collateral Registration Offices marks a major milestone in Somaliland’s ongoing financial sector reforms, with the Central Bank seeking to modernize collateral management, strengthen the legal framework for secured lending, and create a safer environment for credit and investment across the country.