In 2017, Nicaragua enacted “Ley No. 936 de Garantías Mobiliarias” (Law of Movable Guarantees). Contrary to the previous pledge laws, which were inefficiently drafted, leading to many transactions simply falling outside its scope, Law No. 936 is much more effective and expansive as it covers a myriad of assets that may be used as security interests. The assets need not exist at the moment of the contract, and they may be movable, immovable, tangible, intangible, determined or determinable. It additionally expands the types of obligations that may be secured, including both monetary and non-monetary obligations.
Under Law No. 936, there are no restrictions as to who may be a creditor or debtor. The act specifies that any person may grant securities, so long as they enter into a secured transaction governed by Law No. 936, and both the debtor and the creditor sign the document setting up the secured transaction.
Additionally, Law No. 936 established a single online centralised registry where all security interests must be registered. This legal reform will probably improve access to credit for small and medium businesses, as anyone is able to give their goods as collateral for creditors, even if they are not tangible assets.
- Ley No. 936 de Garantías Mobiliarias (in Spanish)- pdf of Act available to download from sidebar http://www.fundacionmicrofinanzasbbva.org/revistaprogreso/en/secured-transactions-act/#:~:text=The%20Nicaraguan%20National%20Assembly%20has,medium%20enterprises%20to%20get%20credit.&text=The%20law%20aims%20to%20provide%20credit%20for%20small%20and%20micro%20Nicaraguan%20enterprises.
- Online Register: https://www.registropublico.gob.ni/
- Further Reading
Last Checked August 2020
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