IDB support for STR in Jamaica (2008 – 12). Context: STR initiative is part of “Jamaica Competitiveness Enhancement Program” to improve business climate Initiatives include: Tax policy and tax administration reform Divestment of State Owned Enterprises SME access to finance
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Basic Approach: Three Policy Based Loan Operations supported by Technical Assistance
1999: 1st Operation: Consensus building workshops
2000/03: Internalization process: Book published, MEF white paper, SBS trans cost study
2003/07: 2nd Operation: ST law in effect & Moveable Property registry nominally functioning
Quasi legal registry instead of notice registry – applications frequently denied on legalistic formality
Unnecessary but mandated use of notary public services
Law permits, but regulations deny, pledging of future assets (goods not yet in possession of borrower)
Law does not allow preference for creditors financing new equipment vs. those financing inventory or the fixed assets to which the equipment is attached
Lack of norms for repossessing collateral in the event of default.
2008/09: Further diagnostic work and consensus building on shortcomings of first STR law
2010/12: 3rd Operation:
- Reform of the legal framework to correct errors and shortcomings of the first law and regulations
- Improvement of the Registry to convert it to a true notice registry.