Legal and institutional framework for movable collateral registration in Ethiopia
No Thumbnail Available
Date
2022-09
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
AAU
Abstract
Access to credit is crucial for economic growth and is the engine for private sector development. Establishing a legal and regulatory environment where movable assets can be used effectively as collateral and, at the same time provide effective credit protection, is a critical step towards responsible and inclusive access to finance. Modern secured transactions system enables individual and entities to use their movable assets as security for credit generating new productive capital, expands investments, creates more jobs opportunities, increases production and productivity, creates opportunities to expand and foster access to and usage of financial products and services. The Ethiopian Parliament thinking of this recently has enacted a modern law governing security rights in movable assets in 2019, the proclamation is supposed to be the single and unified source of the law governing the taking of security in movable assets in Ethiopia. The new legal framework also mandates the establishment of a Collateral Registry Office in charge of registering all security rights in movable assets, filed exclusively online. Undoubtedly, the new legal framework would give businesses and consumers a better opportunity to access credit at a low cost by granting security rights to creditors in a broad range of movable assets. But this law also has certain problem that may cause practical challenges and the incompatibility of the general legal frame work. To do its own humble part, this research paper will attempt to bring the issue of the newly introduced comprehensive law of security right to the spotlight, show the shortcomings of its governing rules and to assess the prevailing collateral registry system. It try to depicts legal and institutional framework for movable collateral registration in Ethiopia, mainly on focusing the exclusion security rights in an immovable assets from the reform process and having different legal regime for treatment of security interests in immovable property, the effect of attachment before judgment in determining a priority security right of creditors in Ethiopian secured transaction law legal frame work and the effectiveness of collateral registry in operation. In so doing, the research will try to show certain short coming of Ethiopian security right legal frame work. And it will try to argue the need for the reintegration of security right in immovable assets and the effect of attachment before judgment into the new comprehensive secured transaction legal frame work.
Description
Keywords
credit and economic growth,movable collateral registration