Access to finance continues to be a major issue affecting the growth and development of Small, Medium, and Micro Enterprises (MSMEs). The National Competitiveness and Productivity Council (NCPC) spearheaded a piece of legislative reform labeled the Security Interest in Movable Assets Act, which aims to bridge this financing gap and improve national productivity and competitiveness.
The development of Saint Lucia’s Collateral Registry in Movable Properties is a vital ingredient for the effectiveness of this new legislation. Elaine MacEachern is a Global Specialist for Secure Transactions and Asset Based Lending with IFC’s Financial Institutions Group. She explained the significance of the Collateral Registry, particularly to the banking and legal sectors.
“So what we are hoping to see is that Saint Lucia is going to be first. It’s a pioneer in the Eastern Caribbean Region and particularly within the OECS Member States. And because Saint Lucia is going first we really hope that the other member states will come on board over the next number of years and that there could be a lot of learning and economies of scale that can result in the region benefiting from that reform which should lead to greater economic opportunities both for the financial institution in terms of their expanded lines of business in terms of financial products and services. But more particularly for the SME sector in having the ability to address access to finance and then being able to use some of the valuable assets that they have in exchange for financing facilities.”
As part of the roadmap of activities for the full implementation of the legislation, a training session for bankers and lawyers was held at the Finance Administrate Centre in April 2023. The training session provided as an introduction to the collateral registry system for Saint Lucia and addressed concerns and suggestions meant to improve the overall functioning of the collateral registry. Sasa Cosic the Senior Consultant with IOS Partners, the developers of Saint Lucia’s collateral registry, facilitated the training session and was most impressed with the interest shown.
“I can’t remember a meeting with the bankers in any other project when we did the implementation of a collateral registry where we had such a large group and such an interest of all the participating parties, bankers, and lawyers. We had 84 bankers and over 40 lawyers. So it was obvious that the private sector and lawyers are more than willing and eagerly expecting the implementation of the moveable collateral system.”
The High Court will host, manage and administer the operations of the Collateral Registry system when it goes live. The technical staff of the high court were also among the stakeholders at the training sessions.
“And I am more than confident that because I saw an unbelievably talented group of people in the high court, very bright people, very well trained and well educated that I have no doubt that they are more than capable to take over the full responsibility of the movable collateral system.”
Director of the NCPC, Lisa Florent-Montoute, said the NCPC remains focused and resolute in ensuring the proper and effective implementation of the legislation and in particular the rollout, sensitization, and utilization of the collateral registry which is germane to the Security Interest in Movable Properties Act.
“The NCPC is really excited about this Collateral registry Project which has been going on and this is primarily because the Collateral Registry is really one that is beneficial to small and medium enterprises in Saint Lucia in gaining ease of access to finance for their businesses in order to increase their productivity.”
The Developers, the team from the IFC, and the NCPC will continue training sessions and launch a public awareness campaign on the use and benefits of this new system. The Collateral Registry System is scheduled to go live in September 2023.