Vuistpand

A possessory pledge, also referred to as a pledge with possession, constitutes a security interest in movable property under which the debtor physically transfers the asset to the creditor. This confers on the pledgee actual control over the collateral, thereby reducing the risk of unauthorised disposal or use by the debtor.

This form of pledge is significant in that it affords the pledgee direct control and a robust position in the event of default. It is distinct from a non-possessory pledge, where the debtor retains possession and the security interest is created by notarial deed or registration.

In practice, a possessory pledge is commonly employed in loan transactions where valuable assets such as machinery, vehicles or inventory are provided as collateral and physical delivery is practicable.