Reform collateral framework

The range of instruments that can be tendered in Jamaica as collateral remains unacceptably narrow - primarily buildings, real estate and late-model automobiles. The Enterprise Research Institute (ERI) study of 2005 noted that Jamaica's security lending did not meet the four standards of a modern collateral framework.

These are 'ease of creating a security interest in a specific property; establishing the priority of the security interest; publicising the existing security interest as a forewarning to other creditors; and expeditious enforcement of the creditor's rights in the event of debtor default'. The effect of these shortcomings, the ERI study noted, is to inhibit the growth of business, and is especially disadvantageous to poor Jamaicans who do not have the collateral favoured by banks.

For more information on the PSOJ's Economic Policy Framework, please visit the PSOJ's website at www.psoj.org.

The following is taken from the Private Sector Organisation of Jamaica's Economic Policy Framework.