Senate Accepts Report on Security Interest in Personal Property Act

The Senate on Friday (April 11) accepted the Joint Select Committee Report on the Security Interest in Personal Property Act.

Minister of Industry, Investment and Commerce, Senator the Hon. Aubyn Hill, said a considerable amount of time was spent in the Joint Select Committee to make sure that the legislation, which seeks to give people who are normally without the traditional forms of acceptable collateral, the chance to get loans from lenders on a secured basis.

“The security that would be used would be movable items and items that tend to be smaller and of less value than the cars and land that bankers have been trained to accept as normal collateral,” Senator Hill said.

The Security Interest in Personal Property Act, 2013, makes provisions for businesses to tap into a more comprehensive range of collateral options, besides land, to access secured loans.

These include inventory, accounts receivables, and intellectual property and are aimed at offsetting limitation challenges micro, small and medium-sized enterprises (MSMEs) experience when seeking to access financing for their operations.

Meanwhile, the Senate also approved the Joint Select Committee Report on the Insolvency Act.

The Insolvency Act consolidates the law relating to bankruptcy, insolvency, receiverships, provisional supervision and winding up.

Senator Hill said the general policy direction is to strengthen the existing legal framework governing insolvency, by simplifying procedure and strengthening the role of the Office of the Supervisor of Insolvency to effectively facilitate the rehabilitation of debtors and preserve viable companies, while protecting the rights of creditors.

“Other jurisdictions have Chapter 11… we didn’t have anything like that. It doesn’t make sense that we allow businesses to go out of business when a certain arrangement could let them stay in business, continue to employ people and eventually get back to profitability and pay off their debts. So, we’re happy that this has come to this stage,” he added.