Honduras: loan market expands thanks to registry for movables

Honduran borrowers have easier access to credit, following the creation of a simple, widely-available system for registering charges on property, other than real estate.

The new rules protect lenders, who can use the registry to confirm that no one has a prior claim on an item of movable property, which a borrower gives as a guarantee.

Once the lender has registered a loan, he or she has first claim on the property, if the borrower were to default.

The creation of a system of guarantees for movable property is important in expanding credit in a country like Honduras, where many people do not own real estate.

The new rules came into force last year, following approval in 2010 of the Law of Guarantees for Movables.

Under the new system, movable property is defined to include physical objects, including cars and other equipment, which can be specifically identified, as well as interchangeable goods, such beans or coffee.

Non-physical assets, such as trademarks or securities, can also be the subject of a guarantee.

Registration procedures in any of six centers located throughout the country are easy and inexpensive, involving only a simple form and the payment of a fee, equivalent to $10.

For more information, please contact Adrian Burgos at [email protected] or 504-3392-2947