Potential Impact of Secured Transactions and Asset-Based Lending on Access to Credit for Women
* (see photo caption below)
The Inter-American Commission of Women (CIM) participated in the Caribbean Capacity-Building Workshop on Secured Transactions and Asset-Based Lending carried out in Kingston, Jamaica on February 10-12, 2015. This event, attended by national and international experts from different sectors, was organized by the Organization of American States (OAS) Department of International Law and the Ministry of Industry, Investment and Commerce (MIIC) of Jamaica. This activity is part of the OAS’ efforts to promote the Model Inter-American Law on Secured Transactions and its Model Registry to contribute to the establishment of modernized systems of secured financing in OAS Member States to make credit more accessible, more affordable and stimulate economic growth throughout the Hemisphere.
Despite the wide variety of financial institutions, access to credit in Jamaica, as in other countries, is limited to only well-established business and persons, who own real estate property. Evidence shows that access to credit remains the number one obstacle for business growth in Jamaica. The steps taken by the Government of Jamaica to establish a legal framework that provides increased access to credit for micro, small and medium sized enterprises (MSMEs) and entrepreneurs, including the recently enacted Security Interests in Personal Property Act (SIPPA), is not enough, as highlighted by Hon. Anthony Hylton Minister of Industry, Investment and Commerce of Jamaica during the opening remarks, and must be supported by targeted sensitization initiatives to ensure its implementation. The challenge that lies ahead is to gain stakeholder “buy-in” for a fully operational secured transactions regime.
The challenges faced by women-owned MSMEs to access credit are usually amplified or harder to overcome. Access to finance is referred by more women-owned SMSMs and entrepreneurs in the developing world as a major constraint to create or develop their business. Access to finance by female entrepreneurs is also limited by traditional stereotypes, gender-sensitive factors, as well as by lack of collateral, and weak property rights and laws, among others. All of these reasons impact women entrepreneurs disproportionally. This is why in the process of amending the legal framework to encourage the financial system to change its interaction with business and other sectors, it is important that financial institutions and other pertinent sectors understand the differentiated needs of women and the importance of women-owned business in their markets. These topics among others related to the potential impact of an effective implementation of secured transactions systems on financial inclusion, and particularly on access to credit for women and MSMEs, was addressed during a discussion panel on this matter. This panel was comprised by the Director of Policy and Research of the Bureau of Women’s Affairs of Jamaica Sharon Robinson; CIM Gender Specialist Ms. Maria Celina Conte; Deputy Minister of Development for SMEs of the Dominican Republic Mr. Joaquin Prestol; Executive Director of the Caribbean Microfinance Ms. Alliance Michelle Scott; and the President of Jamaican Network of Rural Women Producers Ms. Mildred Crawford.
The biggest challenge of the progress of a secured transaction reform is the real impact that it may have in the lives of those facing the greatest difficulties in gaining access to economic resources while facing de facto inequalities.
* From left to right: CIM Gender Specialist Ms. Maria C. Conte; Minister of State, Ministry of Industry, Investment and Commerce; Executive Director, Caribbean Microfinance Alliance Ms. Michelle Scott; and Director, Policy and Research, Bureau of Women’s Affairs.