The Board of the BCRA has approved today the incorporation of the surface right as bank guarantee. The measure will improve access to bank credit for many agricultural producers and other sectors that have exploitation rights over a plot of land owned by someone else.
The surface right was introduced into the Civil and Commercial Code of Argentina by Law 26,994. It is a new property right of a temporary nature over someone else's property and grants its holder (the surface holder) "the power to use, enjoy, and materially and legally dispose of the right to plant, forest, or build, or [a right] on what is planted, forested, or built on the land, the airspace, or the subsoil" (Section 2114).
It is frequent in the agriculture, construction, and forestry sectors, in which a producer economically exploits property in the medium or long term, but without being an owner, which prevents them from having access to traditional mortgage financing.
As a result of this change made by the BCRA, entrepreneurs who do not own real estate will be able to carry out investment projects through bank financing, offering the cash flow from commercial exploitation as collateral.
Several countries—such as France, Spain, Germany, Belgium, Portugal, Japan, Switzerland, Austria, Bolivia, Peru, and Brazil—have similar regulations on the surface right.
In this way, the BCRA continues to expand the availability of credit for productive activities. The changes made in the last year generated a 45% year-on-year growth in business loans and a 26% growth in the first seven months of 2017.
