user Youssry Saleh & Partners calender 14 Feb 2023 views 947 Views

The basis of the financial markets is this straightforward equation- businesses demand credit, and banks financing need collateral to ensure payment. In that sense, banks typically accept immovable properties without hesitation while they become wary of movable assets. Because the majority of their assets are transportable, Small and Medium Enterprises often have limited access to loans.

Actually, lenders trust more to recover their debts when immovable assets are pledged; as they are normally registered as well as any rights thereon. As a result, the danger of information asymmetry is significantly reduced when compared to movable collaterals that did not have a register previous to the new rule. Additionally, the enforcement of rights on immovable assets is much simpler than it is on movable ones.

Two issues—Registration and Enforcement—should be addressed in order to enhance the appeal of movable assets as collateral and, therefore, increase small and medium enterprises access to financing. In this regard, among what has been approved by Law No. 115 of 2015, which regulates movable securities, gave the two benefits that both financials and corporations had been looking forward to.


The law demands for the formation of an “Electronic Registry” to document liens and rights over movable property. The registration process must be completed online. Such registration will assist in determining whether any rights have already been registered before subscribing to the pledge of assets, which will be subject to challenge from third parties, such as subsequent creditors. As a result, the function gives an immovable asset’s first registration, in time and date, priority. In order to contest a registration, creditors may also ask for a temporary order.

Additionally, the movable asset certificates issued by the Registry will have the same legal standing as official papers. The claims about the ability to register and track the status of the assets online have not yet been put to test because the Executive Regulations have not been released yet.

The Movable Collaterals Register in Egypt:

“It is a central electronic registry set up for the declaration of guarantee rights on movables, and the General Authority for Financial Supervision is in charge of monitoring and controlling it.”As long as it contains all the essential details specified in the guarantee contract, the guarantee right established on the moveable is proclaimed by registration in the register by completing the electronic form made available for this purpose through the website.

NB:  The law forbids creation of a security interest on property owned by the Egyptian government, foreign embassies, government privileges or licenses, banks (apart from equipment required for their job to finance their purchase), or property assigned for personal use, or residence, in addition to finance its purchase and any shared possessions such as furniture, unless all owners agree to establish the security right.

The law aims to regulate non-possession security measures:

The law protects the rights of creditors by establishing priorities in cases where the movable is secured for more than one creditor, facilitates funding and lowers its risks, enables funding for small and medium-sized businesses without property assets, and forbids the debtor from transferring guarantees or repeatedly using collateral without notifying the creditors.

The law’s main advantages involve:

  • Switching to an electronic system from a paper-based one; Making moveable collateral that is in the debtor’s possession but not in the custody of the creditor official.
  • Implementing a fine for selling the item without the creditor’s permission coordinating the implementation of movables and coordinating the creditors’ rights , regardless of the fact that the last section of the legislated code (sanctions) has already been adopted in order to specify the appropriate fines and penalties
  • Raising Egypt’s standing for securing financing in the yearly Doing Business report to increase competition for investments in the Egyptian market. The data entered into the register shall be regarded as accurate and admissible as proof.
  • In addition to allowing accelerated litigation processes to protect creditors’ interests. A total of 64,658 declarations totaling 721.2 billion Egyptian pounds have been made by the end of 2020, suggesting that many service businesses—and small and medium firms in particular—have obtained capital to operate.
  • Last but not least, the Movable Collateral Law is a significant move by the Egyptian government to improve the investment climate. It reflects the state’s initiatives and efforts to encourage the use of non-traditional financial instruments for funding and broadens the idea of movables used as a guarantee for funding to achieve sustainable economic development.

Eventually, we discover that Law No. 115 of 2015 contains severe regulations that govern and takes into account the most recent technological advancements although it’s the best option for resolving all the issues that banks and debtors are facing today. In other words, the law has been applied in a generic and abstract way through organizational guidelines or punishments.

Moreover, in light of what was stated in Section Nine, as well as in pursuance with Law 115 of 2015 the law has set specified punishments that are in compliance with all applicable criminal and civil statutes. To manage financial instruments and maintain checks on concessions made to unmovable service providers, the law includes measures for fines that protect the rights of both the creditor and the debtor.