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Secured Transactions

A debtor needs to provide creditors with viable security over their assets,  whether the debtoris a farmer who needs to borrow money to buy a tractor, an enterprise that needs credit from a supplier or the promoter of a power plant who needs to finance a major new project,. Reforms to secured transaction legislation seek to boost the availability of credit, reduce cost and improve the efficiency of the lending market.

A lender or a creditor will take a mortgage or a pledge in order to reduce the risk of losing the money they are owed. If the law or the way in which it is applied does not give creditors confidence that they can recover real value from mortgaged or pledged assets, such a law will have little economic effect.

Conversely, legislation that protects a lender’s rights to debtor assets helps to reduce the risk of providing credit, which increases the availability of financing and improves the terms on which it is available, thereby benefiting the wider economy.

The EBRD helps countries to modernise their collateral laws and offers assistance at all stages of the reform process. We identify what legal reform is needed to achieve an effective legal framework for secured transactions, seek to build a consensus for those reforms and assist in the preparation of the necessary legislation and its implementation.

Core principles for a secured transactions law

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