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Classification of Credit Security in Nigeria: Resolving the Perceived Dichotomy

Jacob Otu Enyia

Emmanuel Usang Okon

Department of Commercial and Industrial Law, Faculty of Law, University of Calabar, Nigeria. Email:


This article is focused on the classification of credit security in Nigeria with a view to resolving the perceived dichotomy in the categorization. Credit security generally is within the ambit of property law which is circumstanced in secured credit. The work also attempts to determine the legal basis of this classification and the inherent utilities. We summarize that classification of security should be maintained for the purpose of distinction and clarity in aid of the unwary and non-legal minds.


In General terms, security or security interest is that proprietary or personal assurance that is given and that helps secure the repayment of a debt or that which crystallizes into value for the benefit of the creditor in case of default by the debtor. It is based on this understanding of security that we will proceed to discuss the classification of security with the aim of resolving the perceived dichotomy in the categorization of security or security interest. The subject matter of this article is of importance to the law of secured credit as well as to the world of commerce generally. Due to the continued ingenuity of financiers and their legal advisers, the world of commerce has developed several forms of agreement which are intended to provide security but nevertheless do not in law create a security or security interest. Hence the aim of this paper is to explain the various classifications of security and the legal benefit derivable therefrom.

We also examined the concept of classification of security which is theoretical and is aimed at laying the conceptual foundation which underscores the various types of security. Furthermore, we identify and analyzed each of the various types of security. We have employed a method of juxtaposing each class of security against the other in order to bring to focus the succinct distinctions between them as well as appraise the legal right conferred by each.

Moreover, the four methods of creating real security were discussed. The focus here is a comparison each of mortgages, charge, pledge, and lien. An analysis of the watertight compartmentalization of security with the aim of highlighting the overlapping areas that exist was effected. And a conclusion on responding to the question of the seeming dichotomy in the classification of security.

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