Jamaica: Micro-financiers Welcome Collateral Registry

Apr 2014
Jamaica, April, 27 2014 - The Jamaica Micro Financing Association (JaMFA) has expressed support for the Companies Office of Jamaica’s (COJ) efforts to get the full participation of microfinance institutions (MFIs) in the functioning of the new National Collateral Registry.

The National Collateral Registry is designed to improve commerce, by expanding access to domestic credit, while minimising the risks of loan default, under the Security and Interests in Personal Property Act (SIPP).

Executive Director of JaMFA, Raymond Gabbidon, says that the registry, which is being operated by the COJ, is an important tool in facilitating increased funding for the micro, small and medium-sized enterprises (MSMEs) sector.

“MFIs can now feel far more comfortable in increasing lending to the MSME sector. The registry will address the risk of using personal items and household furniture for years as collateral on loans, which was a major concern of micro financiers,” he told OBSERVER ONLINE following a Forum for micro finance companies on Tuesday, at the Hotel Four Seasons in Kingston.

The COJ made a live presentation on the workings of the registry at the forum.

JamFA’s chairman and CEO of one of Jamaica’s leading Microfinance institutions, WorldNet Investment Limited, Hurshel Cyrus, challenged his colleagues to step up to the plate and increase funding to the MSME sector.

“The greatest potential for growth and development lies with the MSME sector, and we have been lobbying for a long time for more emphases to be placed on the sector,” Cyrus said.

At least 14 MFIs and five MSMEs, members of JaMFA, participated in the Forum.

The registry forms part of the secured transactions framework, designed to modernise and improve commerce, by expanding access to domestic credit while, at the same time, minimising the risks of loan default.

The SIPP registry will be a repository of information on non-real estate assets tendered as collateral for securing loans under the SIPP Act. These include motor vehicles, stocks and securities, agricultural products, crops and other agricultural yields, machinery and equipment, accounts receivable and futures, future acquisition of security interests and unborn livestock.

Financial institutions will register notices of loans granted and the associated assets used as collateral. The availability of this information in a central database will enable the institutions to verify any previous use of the potential collateral, and establish priority with regard to other claimants on the same asset.

Source : Jamaica Observer

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