Originally from The Journal of Eurasian Law (JEL)

I. Introduction

The most important feature of the market economy is to ensure a sufficient supply of credit. All businessmen need capital to run their corporations so that consumers can enjoy goods and services and afterwards pay for them and, as such, contribute to the economy and economic growth. This is the reason why economists “call credit a blessing, a driving force of the economy and an engine for growth”.1 Therefore, it should be the aim of all lawmakers to create a system with wide accessibility of credit at minimal costs. To create such a system where creditors are willing to provide credits for minimal costs they have to be protected by the law. The lower the risk of non-repayment, the lower the costs of providing credit. Permitting creditors to secure a lending transaction reduces their risk of not being repaid by the debtors and expands the volume of available credit in the economy. Hence, it would be essential for the whole economy to favor creditors with additional rights.