Registration Of Security Under The Secured Transactions In Movable Assets Act, 2017 And Implications For Secured Loan Transactions

1.0 Introduction

The Secured Transaction in Movable Assets Act 2017 ("STMA") was enacted into law in 2017 to provide a comprehensive legal framework for the creation, registration and enforcement of security interests over movable assets. It was also aimed at improving access to credit for micro, small and medium-sized enterprises ("SMEs") by allowing them to use their movable assets, such as inventory, equipment and receivables, as collateral for loans. The security interest is registrable at the National Collateral Registry ("NCR"). The NCR is an electronic public database that contains information on security interests in movable property. The STMA exempts instruments registrable with the NCR from stamp duty in order to make it cheaper for SMEs to use their movable assets as security for loans. Prior to the passing of the STMA into law, the creation, registration and enforcement of security for corporate entities/businesses was already covered by the then