The Government of Saint Lucia is currently advancing an initiative that will allow businesses to use non-traditional forms of collateral to secure financing, it has been announced.
According to the National Competitiveness and Productivity Unit (NCPU) , with the new venture, businesses will be able to use their movable assets such as their inventory, equipment, accounts receivables, vehicles or anything that is of value as security for a loan.
NCPU Director, Fiona Hinkson said that Jamaica has already enacted similar legislation.
“As you know Saint Lucia was number one in the region in doing business and with this new implementation in Jamaica, they have now moved to the number one position which meant that they are now able to provide more financing to locals who want to be able to expand their business,” Hinkson was quoted as saying in a statement issued by the NCPU.
She expressed the hope that the Secure Transactions legislation here would be finalised and approved before the end of 2019.
Hinkson observed that at present, the common form of collateral used is house and land.
According to the NCPU, the proposed new Secure Transaction Legislation will be accompanied by an online securities registry which will be established within the registry of the High Court.
It will provide financial information on security interest on movable properties to financial institutions or persons who provide credit to businesses or individuals, the Unit explained.
Access to Finance is but one of the eleven parameters used to determine the ease of doing business within a country,it was noted.
According to the statistics from International Finance Corporation, a member of the World Bank Group, approximately 70 percent of a firm’s wealth is concentrated in its movable assets.
35 percent of local firms consider the lack of access to finance a major to severe barrier to their growth and competitiveness, according to the NCPU.