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IFC Helps Jordan Develop Secured Lending Law to Increase Access to Finance for Businesses


In Cairo:
Riham Mustafa

Phone: +202 24 619 145

E-mail:
RMustafa@ifc.org

In Jordan:

Nesreen Abu Suleiman

Phone:+962 6 5651183

E-mail:
NAbusuleiman@ifc.org


Amman, Jordan, July 15, 2010— IFC, a member of the World Bank Group, is helping Jordan  develop a legal and institutional framework for secured lending to help reduce the cost of lending, and expand the availability of credit to businesses in the country, including small and medium enterprises (SMEs).

IFC is advising Jordan’s Ministry of Industry and Trade (MIT) as it develops legislation to regulate secured lending – a type of lending involving moveable assets (such as equipment and inventory) as collateral for a loan.


As part of the process to introduce secured lending legislation in Jordan, IFC and MIT organized a workshop in Amman on July 14 that was attended by representatives of public institutions, commercial banks, leasing companies and lawyers to discuss the proposed draft legislation.

Private and public sector stakeholder feedback from the workshop will help Jordan’s government improve the draft law to ensure that it is fully in line with the country’s legal practices.


Dr. Ahmed Attiga, IFC resident representative in Jordan, said, “Enactment of the new legislation will be a first critical step in developing a secured lending framework in Jordan. To ensure this framework is complete, IFC Advisory Services in MENA, in partnership with the Ministry of Industry and Trade of Jordan, will develop an effective collateral registry, and will help build the capacity of local financial institutions to introduce secured lending.”  


Rula Hadaddin, MIT’s representative, said, “Legal reform to enhance the rights of lenders in movable collateral will promote greater access to finance for small and medium sized enterprises in Jordan. Adopting the Law on Secured Transactions will create an important foundation for protecting the rights of banks, microfinance institutions, and leasing companies, which will encourage these financial institutions to provide lending secured by movable properties.”


Secured lending reform, including the creation of a legal framework for secured transactions and the development of a movable collateral registry to publicize lenders’ security interests in movable assets, will increase the availability of credit for businesses, reduce its cost, improve financial system stability, and expand the types of collateral lenders will accept as security.


About IFC

IFC, a member of the World Bank Group, creates opportunity for people to escape poverty and improve their lives. We foster sustainable economic growth in developing countries by supporting private sector development, mobilizing capital for private enterprise, and providing advisory and risk mitigation services to businesses and governments. Our new investments totaled $14.5 billion in fiscal 2009, helping channel capital into developing countries during the financial crisis. For more information, visit
www.ifc.org.