(2) such insurance fund operation as guarantee, financing and investment, etc.

Due to the absence or limited role of personal guarantees or securities provided by the project sponsors, project finance is said to be non recourse or limited recourse financing.

The insolvency law should establish the priority that may be accorded to post commencement finance, ensuring at least the payment of the post commencement finance provider ahead of ordinary unsecured creditors, including those unsecured creditors with administrative priority.

Equivalence of acquisition financing devices to security rights

Security for post commencement finance (paras. 103 and 104)

The insolvency law should enable a security interest to be granted for repayment of post commencement finance, including a security interest on an unencumbered asset, including an after acquired asset, or a junior or lower priority security interest on an already encumbered asset of the estate.

An insolvency law may take a hierarchical approach to the authorization required, depending upon the security or priority to be provided and the level of credit or finance to be obtained.

Attracting post commencement finance providing priority or security

An insolvency law can recognize the need for such post commencement finance, provide authorization for it and create priority or security for repayment of the lender.

Acquisition security rights include those that are denominated as security rights, as well as those that are denominated as retention of title, arrangements and financial leases.

The law should specify that a security right is created by agreement between the buyer, grantor or financial lessee (hereinafter referred to as the grantor ) and the seller, secured creditor or financial lessor (hereinafter referred to as the acquisition financier ) which is in writing and evidences the intent of the grantor to grant a security right or is accompanied by delivery of possession pursuant to the agreement and in accordance with recommendation 9.

The law should treat all devices that perform security functions as secured transactions, including the transfer of title to tangibles or the assignment of intangibles for security purposes, retention of title, financial leases and hire purchase agreements, except to the extent otherwise contemplated in recommendation 7 .

UNCDF will continued to serve as the policy advisor to the UNDP group to ensure consistent application of the best microfinance practices.

Other innovative financing mechanisms include credit guarantees, revolving funds and issuance of municipal bonds.

The law should specify that a security interest over the assets of the estate to secure post commencement finance does not have priority ahead of any existing security interest over the same assets unless the insolvency representative obtains the agreement of the existing secured creditor(s) or follows the procedure in recommendation 67.

The availability of such security was considered crucial for the availability of financing for privately financed infrastructure projects.

(ii) The seller or financial lessor of the same encumbered asset that has retained title to it pursuant to an acquisition security right

Authorization for post commencement finance

The purpose of the provisions of the law on acquisition financing devices (sales with a retention of title arrangement, purchase money security devices and financial leases) is to

Similarly, where secured creditors consent to revised treatment of their security interests, approval of the court may not be required.

(i) Another secured creditor with a security right in the same encumbered asset (whether as an original encumbered asset or proceeds)

Tools include seed funding, training, consultation services, interest free proposal development loans and more flexible mortgage loan insurance to facilitate the financing of affordable housing.

The law should provide that the priority, provided under recommendation 130, for an acquisition security right in inventory over a pre registered security right in the same goods applies to the proceeds of such inventory, provided that the acquisition financier notified pre registered financiers with a security right in assets of the same kind as the proceeds.

The deposit given by the customer, all the securities that have been purchased through securities lending and borrowing, and all the funds from the sales of securities are collaterals to the securities firm, and shall be deposit to the customer securities guarantee account or the customer funds guarantee account and credited to the customer s credit granting account.

(a) A security right in an asset that is not effective against third parties is subordinate to a security right in the same asset that is effective against third parties, without regard to the order in which the security rights were created and

Frequently, the only unencumbered assets that may be available for securing post commencement finance will be assets recovered through avoidance proceedings.

The law should provide that, in the case of default on the part of the buyer, grantor or financial lessee, the seller, purchase money secured creditor or financial lessor has, to the maximum extent possible, the same rights and remedies as the holder of a security right.

In any case... why should we have to bear any more criticism than we have to?

(b) Export Loan Guarantees guarantee schemes to support domestic and export financing for SMEs are generally operated by government agencies or non profit organizations.

The Multilateral Investment Guarantee Agency (MIGA), the newest member organization of the World Bank Group, facilitates investments through the provision of investment guarantees against the risks of currency transfer, expropriation, and war and civil disturbance.

It would be useful to consider ways in which investment risks would be shared by the parties with the backing of existing or future financial institutions.

(65) The insolvency law should enable a security interest to be granted for repayment of post commencement finance, including a security interest on unencumbered assets, including after acquired assets, or a junior or lower priority security interest on already encumbered assets of the estate.

Some forms of guarantees provided by the host Government may be supported by a guarantee issued by international financial institutions, such as the World Bank.

The insolvency law should specify that, where the existing secured creditor does not agree, the court may authorize the creation of a security interest having priority over pre existing security interests provided specified conditions are satisfied, including

These examples represent only a few of the numerous forms of secured credit transactions currently in use, and an effective secured transactions regime must be sufficiently flexible to accommodate many existing methods of financing, as well as methods that may evolve in the future.

3 Type, amount and internal approving procedure of external investment and guarantee of the securities firm

The insolvency law should provide that, in the case of the insolvency proceedings of the grantor, the acquisition financier has the rights and duties of a holder of a security right.

Article 50 A securities firm that carries out securities lending and borrowing business shall sign a securities lending and borrowing contract with the customer, and shall open a customer securities guarantee account with the securities registration and settlement organs, and a customer funds guarantee account with the designated commercial bank in the name of the securities firm in accordance with the provisions of the securities regulatory agency under the State Council.

To the extent that the value of the encumbered asset is insufficient to satisfy the secured creditor's claim, the secured creditor may participate as an ordinary unsecured creditor.

The law should provide that an acquisition security right is subject to the recommendations in this Chapter regarding effectiveness against third parties and priority even if the acquisition financier (i) also has a security right in the goods securing non acquisition obligations of the grantor or (ii) has a security right in other assets of the grantor securing the payment obligation relating to the acquisition security right.

(c) Foreign exchange transactions, inter bank payment systems, transfer of security rights and transfer of economic assets

(179) The insolvency law should provide that the insolvency representative may determine the portion of a secured creditor's claim that is secured and the portion that is unsecured by valuing the encumbered asset.

Also present were representatives of CARICOM, MIGA, UNCTAD, UNDP, UNIDO and the private sector.

196. Statements were made to the effect that, in practice, lenders expected to obtain the widest possible security over the assets of the project company, including the intangible assets.

Still, the vast majority of poor people in the least developed countries do not have access to microfinancial services owing to the policy and regulatory environment, insufficient access to information, lack of collateral, and weak human and institutional capacities.