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Federal Reserve Bank of Atlanta
1000 Peachtree Street N.E., Atlanta, Georgia
Across Latin America and the Caribbean small businesses do not have access to commercial credit. They pay up to 40% for loans; large businesses obtain loans at much lower rates. With a few exceptions, financial institutions will only accept real estate and vehicles as collateral. According to the World Bank, over 70% of the assets of small and medium-sized businesses (SMEs) in developing countries consists of moveable assets and over 70% of loan applications from SMEs are rejected because they do not possess real estate to use as collateral. Lenders will not accept moveable assets as collateral since court costs and legal fees are so high. Starved for operating capital, small businesses face impossible choices: borrow from the informal credit networks, or do without.
The purpose of the conference is to bring together countries working on secured transaction reform with donors, commercial banks, and legal experts to share experiences, coordinate efforts, and share experiences and best practices.
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