TIRANA, May 31 – With credit failing to show signs of recovery despite the central bank’s easier monetary policy, the Albanian government is making legal changes to give a boost to sluggish credit which would also reinvigorate consumption and investment, two of the country’s key drivers of growth.
Some amendments to the law on securing charges, already submitted to Parliament, will improve the legal and regulatory framework on financing obtained through intangible assets to increase transparency and boost credit, says the government.
The amendments come after the World Bank warned in its 2015 Doing Business report getting credit became more difficult in Albania.
“Albania weakened its secured transactions system through an amendment to the securing charges law that does not allow intangible assets to be secured with a non-possessory pledge,” said the World Bank report.
Some 2013 amendments to the law on securing charges had created a legal void limiting business opportunities to obtain loans in case of using intangible assets as collateral, says the report accompanying the amendments.
Intangible assets which may be placed as collateral include patents, trademarks, copyrights, trade secrets, customer lists, domain names and proprietary designs.
The Albanian government has also drafted a new bankruptcy law, simplifying the existing prolonged procedures and speeding up the approval of reorganization plans which is also expected to have a positive impact on the further reduction of non-performing loans.
Drafted with technical assistance from the World Bank and the IMF, the new bankruptcy law is expected to be submitted to Parliament by end-June 2016.
“It will incorporate best international practices, simplify the existing framework, allow for expedited approval of reorganization plans, and protect the economic and governance rights of secured and unsecured creditors,” the government says.
