— Bill to allow moveable property as bank collateral coming
— consultations held with lawyers

AS stakeholders continue to be engaged about the Moveable Security Bill the Guyana Bar Association was on Saturday given an in-depth examination of the provisions of the Bill and given a chance to make inputs at a workshop held at the Cara Lodge.
The workshop was conducted by Inter-American Development Bank (IDB) Legal Consultant, Tom Johnson, who carried out his first exploratory mission in Guyana in January of this year.

Attorney General Basil Williams delivered the opening remarks at the event.
“To the lawyers present, we are prepared to receive your inputs and demonstrate the applicability of this bill,” Williams said.

President of the Guyana Bar Association (GBA) Kamal Ramkarran thanked the facilitators for providing the opportunity for legal minds to better understand the provisions of the Bill and what it would mean for them.
“It is extremely beneficial for us to be fully aware of the legal issues arising out of this legislation and to find ways to make full use of it when it comes into force,” Ramkarran said during his address.

In the works as far back as 2002, the Moveable Security Bill seeks to allow for moveable property to be used as collateral when seeking access to finance. Generally, such transactions are not considered secure, so lending agencies are skeptical to use such assets as collateral.

However, implementation of the bill will now see such transactions becoming secure.
“The law governing secure transactions rely on complex legal and equitable rules for determining propriety amongst claimants competing for the same assets when a debtor defaults. These rules increase uncertainty for lenders,” Williams said.

The Inter-America Development Bank (IDB) funded project is being rolled out by the Ministry of Business in collaboration with the Ministry of Legal Affairs and aims to allow the use of moveable property as collateral when seeking to access finance.
Williams called the initiative “very revolutionary” for what it would mean for many small businesses in Guyana and access to finances.

“Farmers and miners have difficulty using their livestock and minerals as collateral. Access to credit in the existing system increases the risk for financial institutions, deters foreign direct investments and impedes access to finance for small and medium-sized business,” Williams explained.

“The solution? The Moveable Property and Security Bill 2018 provides for a comprehensive integrated framework for secure transactions in moveable property. In this framework all moveable property assets qualify as collateral, regardless of item or title.”

The initiative comprises of two parts: the development of a legislative framework and the establishment of an electronic collateral registry — The Secure Traction Regime project. It is expected to work alongside other credit systems already in place.

“Together with the newly introduced credit information system and legislation, this legislation will enhance risk-assessment management and mitigation for lenders,” Williams said.

Williams recalled having first encountered such a system in Kenya, where cattle are a very important commodity and persons were able to use their cattle as a means of wealth.
“I was so happy to see that farmers in fact utilise their livestock as collateral,” said Williams.