The Economic Committee in Congress has agreed to pass a law that will enable collateral such as merchandise or intangible assets such as patents to be used to obtain loans.
The law will facilitate the process for natural and legal persons to apply for loans using collateral such as their properties, tools, patents, trademarks and merchandise. "It protects consumers more, is more respectful of consumer rights, is much fairer and avoids abuses," said the congressman, Francisco Zablah.
A draft law on Secured Transactions has been presented in the Legislative Assembly, which gives MSMEs greater access to commercial credit.
The Minister of Economy, Armando Flores and the Deputy Minister of Trade and Industry, Francisco Lazo presented today, Monday, January 7, to the President of the Legislative Assembly, Sigfrido Reyes, a draft law on Secured Transactions with which it is intended that the micro , small and medium enterprises (MSMEs) will have greater access to commercial credit through collateral.
When there aren’t sufficient assets to use as collateral for bank financing, producers are registering their crops in the "Registro de Garantías Mobiliarias" (Movable Collateral Registry - RGM).
Prensalibre.com reports that "Of the 400 entries of movable items from January to November in the RGM, at the Ministry of Economy (Mineco), more than 150 correspond to crops of gold and pergamine coffee.”'
The registration of sugar inventory in the Property Guarantee Registry (RGM) is the biggest since its creation.
As a guarantee for a $75 million loan, Sucden Americas Corporation has registered a 20,000 ton sugar inventory.
Prensalibre.com reports that, "the product will either be stored in Expogranel's installations or those belonging to the Association of Guatemalan Sugar Producers (Asazgua)".
The new law will allow lenders to accept personal property as a guarantee for loans.
The head of the Honduran Association of Banking Institutions (AHIBA), María Lidia Solano, told Latribuna.hn that, "movable guarantees are an instrument that can be used to give small and medium sized producers access to credit".
In order to use personal property as a guarantee for a loan it must be registered with the Chamber of Commerce, which will provide a certificate.
A law project will enable creditors to accept movables as collateral for loans.
Juan José Lagos, micro-credit expert, explained that machinery, work accessories, accounts receivable and intellectual property could be used as collateral when soliciting credit.
Lagos also said: "The law will ease the guarantee problem for people, as currently creditors only accept real estate, like houses and lots, as collateral".
In the 2 months that the Secured Transaction Registry has been operating, there have been 91 inscriptions for amounts of up to $20 million.
This registry allows companies to inscribe all types of assets and is seen by companes as a way to access more credit in the financial system.
In an article in sigloxxi.com, Juan Orlando Garcia Rivera, a registry official, indicated that the inscriptions have been made for large amounts of up to $20 million and that "an endless amount of property has been given as collateral such as: agricultural machinery, business inventories, credit titles, brands and trade names."
The Property Guarantee Registry (RGM) received its first registration for $10 million on Monday.
According to prensalibre.com "Erasmo Velasquez, vice minister of Economy, confirmed that the Nuevos Almacenes S.A. company, which runs the Cemaco stores, registered a guarantee for its warehouse stock, in order to request a loan from a bank abroad."
The Ministry of the Economy will be in charge of the Registry (RGM) which will start to function on January 2.
According to prensalibre.com, "micro, medium and small business will be able to access credit and property at the registry as a guarantee for banks and other financial entities, such as agricultural equipment, harvest, merchandise inventory, certificates, computers, and other property.
The Chamber of Commerce is promoting the approval by Parliament of the Real Estate Guaranty Law.
This law will make it possible for businessmen to guarantee their payment obligations using real estate and rights, including those not accepted under the current law. They can also obtain financing more easily and under better conditions. This solves the problem of lack of access to loans for those without property, which limits their financing sources.
The Property Registry will be in charge of temporarily recording the real estate guaranties.
This resolution, contained in decree 46-2008 and which has been in effect since January of this years, will allow an individual to offer his work tools, harvest, sales and productions, etc as a guarantee to obtain credit. The transaction will be recorded in a registry in order to legalize it.