Nepal moves to allow IP-backed loans

The Government of Nepal is about to enact a new law which will, amongst other things, allow companies to use their IP and intangibles as security for loans.

The Secured Transactions Bill, 2023 has just been approved by the country’s president to come into force.

The Bill introduces provisions allowing banks and financial institutions to issue loans using movable assets as collateral. Under the new law, banks and financial institutions will be able to accept as collateral moveable assets including machinery, mineral rights, livestock, agricultural crops, processed food products – and intellectual property rights such as patents and trade marks.

Under existing Nepali law, notably the Secured Transactions Act, 2006, banks and financial institutions can only lend against tangible, immovable, property, unless the Nepali Central Bank specifies otherwise.

The new bill will involve the creation of a new registrar’s office to oversee financial transactions involving moveable assets.