- Businesses should now be afforded greater access to credit, following passage of the Security Interests in Personal Property Act (2013).
- The legislation will allow, for the first time, intangibles, including intellectual property and other forms of personal property to now become part of the collateral.
- Additionally, it allows the secured creditors the right to seize and repossess such property speedily upon default of payment.
Businesses should now be afforded greater access to credit, following passage of the Security Interests in Personal Property Act (2013), in the Senate, on December 12.
The Bill was passed with 105 amendments after a lengthy debate with contributions from Opposition and Government Senators.
A requirement under the agreement between the Government of Jamaica and the International Monetary Fund (IMF), the legislation was approved in the Lower House on December 3 with 84 amendments.
The legislation will allow, for the first time, intangibles, including intellectual property and other forms of personal property to now become part of the collateral that can be pledged to secure financing for business.
Additionally, it seeks to remove any ambiguity relating to the property pledged, to whom such property is pledged, and allows the secured creditors the right to seize and repossess such property speedily upon default of payment.
Piloting the Bill in the Senate, Justice Minister, Senator the Hon. Mark Golding, said it seeks to address the critical challenge of securing capital by businesses looking to implement their business plans.
“In this regard, the Bill is designed to support the enabling environment for businesses and is expected to contribute positively to achieving the objectives of economic growth and job creation,” he said.
Senator Golding further contended that it “represents a landmark piece of legislation” that will significantly improve the legislative framework of governing the business environment in Jamaica and is anticipated that it will have a positive impact on the country’s international ranking for doing business.
“This Bill must be viewed as an integral part of a broader set of legislative reforms that are aimed at modernising the legislative architecture for business and it will ultimately speed up the process of broad-based growth and economic inclusiveness in this country,” he said.
Lamenting that currently, access to credit is limited primarily to well-established businesses and persons who own real property, the Minister noted that the Bill is designed to modernise and improve the availability of domestic credit to the private sector, while effectively minimising the risk of non-payment of loans.
During the debate, specific suggestions were made and incorporated into the Bill, one of which came from Opposition Senator, Nigel Clarke, who proposed that the transition period for institutions to adjust to the new requirements under the law, be extended from 270 days to a year.