In an effort to improve the ease of doing business in Saint Lucia, the government is undertaking a number of interventions in the business environment as it relates to improving access to finance.
The National Competitiveness and Productivity Council (NCPC), a member of the Doing Business Task Force, is coordinating the legislative framework that will facilitate the use of movable properties to secure loan financing. Access to finance is but one of the eleven parameters used to determine the ease of doing business within a country.
Fiona Hinkson, Director of the National Competitiveness and Productivity Unit (NCPU) explained how the proposed legislation under the rubric “Secure Transactions in Movable Properties” will transform the business environment.
“Right now the common form of collateral used is house and land. With this new venture, businesses will be able to use their movable assets such as inventory, accounts receivables, equipment, vehicles, and anything that is valuable to the business, in order to secure loan financing.”
According to the statistics from the International Finance Corporation, a member of the World Bank Group, approximately 70 percent of a firm’s wealth is concentrated in its movable assets. Hinkson highlighted that Jamaica has already enacted similar legislation and she is hopeful that the Secure Transactions Legislation would be finalized and approved before the end of 2019.
“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 means that they are now able to provide more financing to locals who want to be able to expand their businesses.”
The Secure Transaction Legislation would be accompanied by an online securities registry which would be established within the Registry of the High Court. It will provide financial information on security interest on moveable properties to financial institutions or persons who provide credit to businesses or individuals.
“It also gives the financial institution the comfort in knowing that there is a legal framework for them to on-lend using movable properties. Also, we expect to see an improvement in the business environment. We expect to see these types of initiatives impacting the country’s overall competitiveness.”
Thirty-five percent of local firms consider the lack of access to finance a major to sever barrier to their growth and competitiveness.
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