Financial Markets

August 10, 2012 - Secured transactions reform is critical to economic growth in Latin America and the Caribbean, according to attendees of a Conference co-organized by IFC's Access to Finance and Investment Climate advisory teams.

“All businesses operate on the basis of credit, so when small enterprises that don’t own real property or other estate assets that banks demand as collateral get charged rates of up to 40 percent, growth is stifled,” said Ambassador Charles Shapiro, President of the Institute of the Americas. “Enabling these businesses to use what they have - moveable assets like tractors or inventory - reduces risks and transaction costs for both borrowers and lenders and lets credit flow.”

Applying Global Lessons

IFC, as part of its broader commitment to building financial infrastructure, has become a leader in driving Secured transactions reform and the establishment of modern, Web-based collateral registries working in more than 20 countries.

In Mexico, where IFC partnered with the Ministry of Economy, the Registro Unico de Garantias has registered over 74,129 collaterals for a total secured amount estimated at over $190 billion, since it began operations in October 2010.

Encouraged by these outcomes and emerging results in Colombia, Haiti's delegation to the event committed to set up a public-private working group on Secured transactions. Costa Rica and others from across LAC are now requesting IFC's support to take similar steps and apply lessons from other IFC projects from around the globe, including China, Ghana, and Vietnam.

The Conference on Secured Transactions Reform for Latin America and the Caribbean, hosted by Atlanta Federal Reserve Bank, was the first of its kind for the region.

The event, which convened over 55 representatives from government agencies, central banks, multilateral development banks, NGOs, and the private sector from 12 countries, was an opportunity to share best practices, ideas, and expertise on the legal and institutional framework governing the secured lending model in the region.

A Committee of Latin American officials committed to advancing reforms including Nicolás Ardito‐Barletta, former President of Panama and Luis Guillermo Vèlez, Superintendent of Companies of Colombia, will continue this exchange in partnership with IFC, the Institute of the Americas, and the National Law Center for Inter-American Free Trade.

For more information about the conference, please visit the Institute of the Americas website.
Learn more about IFC’s support in reforming collateral laws and registries.