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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:The functional equivalence of purchase money security interest in civil law: an intimate model for Ethiopian law of security interests
Author:Gikay, Asress
Periodical:Journal of African and international law (ISSN 1821-620X)
Geographic term:Ethiopia
Subjects:civil law systems
business financing
legal reform
Abstract:Purchase Money Security Interest (PMSI) is one of the security devices extensively used in common law, most notably in the US, Australia and New Zealand. PMSI, prevalent in continental civil law systems in its functional equivalence, is the borrower's ability to use a supplied or purchased property as collateral to secure the price of the property so purchased or used as collateral. This form of security device is a key tool to accessing credit. As access to credit is of ultimate importance in Ethiopia, USAID recommended introducing PMSI in Ethiopia. This article reveals the concept of PMSI as a means of financing businesses, its general application and its policy and economic rationale making it imperative for a country engaged in legal reform to understand its purpose, content and impact on financing businesses. Moreover, at the heart of this analysis is a reaction to the suggestion made by USAID that Ethiopia should introduce PMSI without exposition of its content, source and reason for introducing it in Ethiopia and its compatibility with the current socio-economic setting. Notes, refs. [ASC Leiden abstract]