by Curlan Campbell
- USAID providing support for legislative reforms in Grenada
- Grenada Government one of first in region to implement project
- Grenada to interface with St Lucia’s collateral registry digital infrastructure
The United States Agency for International Development (USAID) is providing support for legislative reforms in Grenada that allow the use of movable assets as collateral, enabling better access to secure financing for Small and Medium-sized Enterprises (SMEs).
Reforms are underway in the legislative framework to permit companies to use their movable assets as collateral for financing. Examples of movable assets that can serve as loan collateral include inventory, equipment, accounts receivable, vehicles, or any other valuable asset. The USAID Caribbean Business Enabling Environment Reform (CBEE-R) is responsible for making all of this possible. It is anticipated that the development of policy documents to support the implementation of this project will take at least 18 months to be completed.
This project, valued at $8.6 million over 3 years, aims to enhance businesses’ access to electricity, internet connectivity, digital financial services, and finance by improving private sector involvement, fostering a more effective public-private dialogue, and promoting inclusive and participatory assessment, development, and implementation of public policies.
On Wednesday, 8 May 2024, the United States Agency for International Development (USAID), in partnership with the International Development Group LLC (IDG), hosted a workshop aimed at strengthening the private sector to advocate for reforms that enhance Grenada’s business and investment climate. The workshop is part of a series of support activities identified for Grenada under the USAID Caribbean Business Enabling Environment Reform (CBEE-R) Activity secured transaction framework reforms.
Durwin Humphrey, Project Management Specialist with USAID Eastern and Southern Caribbean Mission, responsible for Economic Growth and Food Security across 11 countries, was among officials at the workshop held at the Radisson Grenada Beach Resort. “If you check the data, you’ll see that access to finance is perhaps the number one issue for businesses across the region. You can’t have finance, you can scale your operations and you can grow.” Humphrey said, “We will now have a digital collateral registry, where all these assets will be registered and, valued and then you’ll be able to lend against them. We’re talking about a regional system as well, not just one in Grenada. Information about this, these assets, will be available across the board, in the Eastern Caribbean region and even further afield,” he continued.
Humphrey praised the Grenada Government for being one of the first in the region to implement the project, citing their foresight. “We’ve seen with this new regime coming on board, in places like Jamaica and St Lucia, a lot more leverage for those businesses. And I think for the case of Grenada, the government has just made a decision to move in that direction, based on what they’ve seen and they are still among the first in the region to make this type of move. Guyana is in the process of doing this and potentially Suriname as well,” he said.
To promote the adoption of a consistent legal and institutional framework for secured transactions, the International Finance Corporation (IFC), the largest global development institution focused on the private sector in emerging markets, is working closely with the Eastern Caribbean Central Bank. One aspect of this is the establishment of a regional web-based collateral registry for movable assets in the Eastern Caribbean Currency Union (ECCU). To achieve this goal, the ECCB and IFC recommend the adoption of a uniform legislative model for secured transactions throughout the ECCU. In addition, the IFC will partner with the ECCB to evaluate prudential guidelines concerning the utilisation of movable assets as collateral.
Dr Natasha Ward, Private Sector Development Specialist at USAID CBEE-R, said the digital infrastructure to support the collateral registry has already been established in St Lucia, therefore making the process seamless for Grenada. “St Lucia has established a collateral registry for the digital infrastructure so, all that needs to happen on the Grenada side is then they will have to create an interface. They will have a Grenada-facing page but the infrastructure sits on the St Lucia infrastructure and the intention is to have a regional reform. When the OECS countries come on, then each country will be able to benefit from that initial investment in infrastructure that St Lucia made.”
CBEE-R is currently piloted in Suriname, Guyana, St Lucia, and Grenada. St Lucia and Jamaica passed the Security Interest in Movable Property Act in parliament in 2022, and one year later were able to establish Security Interest in Movable Property Registry (SIMPR).
