Lusaka, Zambia, June 1, 2016—
IFC, a member of the World Bank Group, has helped Zambia create a modern
secured transactions law, which will allow entrepreneurs and smaller businesses
in the country to use moveable collateral to access loans, supporting growth
and financial inclusion and strengthening the financial system.
The law, the ‘Personal Property Security
Interest Act’, creates a legal framework that will allow borrowers to
use moveable collateral, such as equipment, machinery, inventory, and other
types of moveable property to access finance. It will especially help those
who do not own non-moveable collateral (such as land), including many women
Elaine MacEachern, Global Specialist,
Secured Transactions and Collateral Registries for the World Bank Group’s
Finance and Markets Global Practice, said: “The enactment of this law
is a critical first step in developing a secured lending framework in Zambia
that protects the rights of all types of regulated financial institutions,
microfinance institutions, and leasing companies, encouraging them to provide
financing secured by moveable collateral. To ensure this framework is complete,
we must continue working with the Government of Zambia to build an online
personal property security registry system.”
The establishment of a modern collateral
registry in Zambia will allow small businesses and individuals lacking
traditional collateral (such as land or real estate) to register their
moveable assets as collateral in order to secure a loan from a financial
institutions or other lending institutions.
By 2020, the project aims to have generated
$2 billion in financing to firms and benefitted 6,500 SMEs, 1,200 micro
enterprises, and 1,200 women entrepreneurs.
IFC, a member of the World Bank Group, is
the largest global development institution focused on the private sector
in emerging markets. Working with more than 2,000 businesses worldwide,
we use our capital, expertise, and influence, to create opportunity where
it’s needed most. In FY15, our long-term investments in developing countries
rose to nearly $18 billion, helping the private sector play an essential
role in the global effort to end extreme poverty and boost shared prosperity.
For more information, visit www.ifc.org.