<mark>The competition between the two systems was expected to motivate performance and provide users access to better services. Prior to the reform, enforcement backlog exceeded 360,000 cases. 30,000 cases were filed with private agents between May and November 2006, 3,500 had been finalized by January 2007. The system has become a model for other reforming systems.</mark>

**<mark>The Kyrgyz Republic</mark>** <mark>has similarly introduced a system that will include both private and State enforcement officers; in fact, Kyrgyz reformers visited Bulgaria to interact with their counterparts and learn from the Bulgarian experience in designing their own system.</mark><sup>30</sup>

<mark>In</mark> **<mark>Macedonia</mark>**<sup>31</sup> <mark>, Bulgaria’s Balkan neighbor, the system to enforce judgments was privatized (law passed in 2005), with good results—according to the U.S. Stated Department, between January and July 2008, the total debt collected through the Macedonian private enforcement system was $42.2 million. Further, out of the 30,657 cases filed from January to August, enforcement agents disposed of 15,355, which was 31 percent more efficient than the previous enforcement system. Macedonia’s average time to dispose of an enforcement case is now 60 days, making Macedonia a regional leader and significantly improving its business climate.</mark> <mark>In</mark> **<mark>Slovakia</mark>** <mark>, after the introduction of a secured transactions reform, and specific reforms making enforcement procedures more efficient through the introduction of the Law on Auctions, the time needed to foreclose on a mortgage decreased from 560 days to 45 days.</mark><sup>32</sup> <mark>In</mark> **<mark>Romania</mark>** <mark>, in 1999 banks were authorized to hire and employ enforcement agents that had to be registered with the Ministry of Justice and had to comply with certain formalities, such as a close supervision to ensure lawfulness of the process. An assessment carried out a few years later showed that after the introduction of such reforms, the execution of bank debt related cases had significantly improved.</mark> <mark>In</mark> **<mark>India</mark>** <mark>, the Securitization Act of 2003 now permits financial institutions and housing finance companies, which account for 90% of lending, to enforce security out of court. Further, time to recover collateral has dropped from 10 years to nine months, and banks reported that non-performing loans have fallen.</mark><sup>33</sup>

**Alternative Dispute Resolution (ADR)** _._ Out of court enforcement mechanisms can include the execution through the financial institutions and other specialized institutions or through Alternative Dispute Resolution (ADR) Mechanisms, such as arbitration or mediation. The use of such mechanisms to enforce the payment of debts or seize assets secured as collateral is limited to those countries which have developed both the legal/regulatory and institutional framework for these mechanisms to be effective. Likewise, some countries, e.g. Colombia, have developed legal frameworks for mediation/conciliation in which the settlement agreement of a conciliation

> 30 Interview with reformer involved with the Kyrgyz project.

> 31 U.S. State Department page on FY2008 assistance operations in Macedonia: <u>http://www.state.gov/</u> p/eur/rls/rpt/seedfy08/117521.htm.

> 32 See ―Secured Transactions Reform and Access to Credit‖, Frederique Dahan and John Simpson. Elgar Financial Law Series, 2009.

> 33 Doing Business Database, 2005, World Bank.

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