The government of Angola in a cabinet meeting on Thursday approved the draft law on the Legal Regime of Secured Transactions and Registration of Guarantees, according to official information.
The bill, which will now be sent to the Angolan parliament for discussion and approval, establishes the legal regime of moveable assets, as collateral against their obligations, as well as tailoring them to international requirements and standards.
The statement issued at the end of the meeting of the Council of Ministers said that, with the approval of the bill, the Angolan government intends to improve the business climate in the country by promoting and encouraging credit.
The measure is expected to drive increased competitiveness in the financial services sector, through loans from non-banking financial institutions.
The Minister of Justice and Human Rights in Angola, Francisco Queiroz, said at the end of the meeting that the proposed law sets up the normative and institutional mechanisms for the future use of moveable asset-backed guarantees in access to credit.
Currently, “in order to obtain credit, companies and individuals have to provide a real estate asset as a guarantee, specifically land, homes and other types of real estate, which they hand over deliver in the form of a mortgage,” he said.
However, he added that there are companies that do not have these assets, mainly small and medium-sized enterprises, but which own movable property, such as bank accounts or agricultural goods, as well as cattle, credit securities, vehicles, and machinery.
With this draft law, Queiroz said, these companies can submit these assets as collateral to obtain financing. (macauhub)