Small businesses in Belize will soon have easier access to finance with the advent of the Movable Property Security Rights Bill 2024, the Prime Minister of Belize Hon. John Briceño announced at last Friday’s House of Representatives sitting.
“This bill is part of a package of reforms and initiatives this government has put together to foster the expansion of small, micro, small, and medium-sized enterprises or MSMEs ecosystem in Belize,” the prime minister announced. “The [Bill] will directly address one of the most significant barriers to growth for small businesses, their ability to access finance.”
The bill addresses a long-standing businesses in Belize, where access to credit is often limited by the inability to offer immovable property like land or buildings as collateral.
“This bill is not just about economic growth. It is about empowering the small business owners, farmers, and entrepreneurs who have long been sidelined by a financial system that doesn't recognize their assets,” declared the prime minister.
Historically, Belizean banks and other financial institutions have preferred real estate as security, leaving many small businesses — which often don’t own valuable land — with few options for securing loans.
The World Bank’s 2010 Enterprise Survey noted that nearly 68% of Belizean small business owners saw access to finance as a major constraint.
This bill, for which works have been in motion for close to a decade, offers a new solution by permitting businesses to use their movable assets, such as equipment, vehicles, and inventory, as security for loans (see section 7 of the Bill).
This is a significant shift from the traditional reliance on immovable property, broadening opportunities for small businesses that have valuable, non-real estate assets but struggle with cash flow.
The Prime Minister highlighted that the bill would stimulate growth in Belize’s entrepreneurial sector by making it easier for businesses to access the funds they need to expand.
He explained, “Once enacted, this bill will reduce risk for lenders, make it easier for MSMEs to access loans at lower interest rates, and create a simple, affordable process for using movable assets like equipment, inventory, or even accounts receivable as collateral.”
Among the key features of the bill is the creation of a new Collateral Registry under the oversight of the Registrar, where businesses can register their security interests. This registry will increase transparency, making it easier for lenders to verify claims on movable assets and secure their interests. The bill also outlines detailed procedures for registering movable assets as collateral, ensuring that third-party rights are protected while making the system accessible to all businesses.
Notably, the bill covers a wide range of movable assets, including equipment, vehicles, livestock, and even intellectual property, which could greatly benefit innovative startups in Belize. It specifies that businesses can use present and future movable assets as collateral (Section 6), allowing more flexibility in securing loans. For example, a construction company could use its existing fleet of vehicles and future equipment purchases to secure a loan, enabling further expansion without needing to own a large piece of land.
The bill also incorporates protections for lenders, ensuring they can maintain priority over the collateral even if the business faces financial difficulties or insolvency. This balance between the needs of lenders and small businesses is designed to encourage more financial institutions to lend to smaller enterprises, expanding the pool of available capital.
The Movable Property Security Rights Bill opens up financing options for businesses that have been locked out of traditional credit markets due to lack of immovable assets. By empowering small businesses to tap into their existing resources, this bill is expected to drive greater economic participation and growth across said the Prime Minister.
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