Ulaanbaatar, Mongolia, February 20, 2017— IFC,
a member of the World Bank Group, the Mongolian Ministry of Justice and
Home Affairs, and other stakeholders today launched a web-based pledge-notice
registry. The registry, part of a joint initiative to reform Mongolian
secured transactions, will improve access to finance for small and medium
enterprises (SMEs) by facilitating lending against movable assets as collateral.
Other stakeholders involved in the project are Bank of Mongolia and Mongolian
Bankers’ Association, and Implementing agency of the government of Mongolia,
General authority for intellectual property and state registration.
The registry is a major milestone in IFC’s
efforts to encourage financing against movable assets in the country. Access
to finance is a challenge faced by many Mongolian SMEs, which struggle
to obtain bank loans as they do not own land or buildings that banks generally
seek as collateral.
The IFC-supported Law on Tangible and Intangible
Movable Property Pledge, which governs the registry’s functioning, will
go into effect on March 1, 2017. The new law along with the registry, will
allow SMEs to offer moveable assets such as accounts receivable, inventory,
equipment, and warehouse receipts as collateral to banks. The new system
will reduce the need for paper documents and will notify creation of pledge-rights
to existing and prospective lenders. To date, over 1,000 people have attended
knowledge-sharing events and trainings on movables lending organized by
IFC.
“Supporting SMEs and entrepreneurs is one
of the government’s top priorities,” said Mr. Byambatsogt S, Minister
of Justice and Home Affairs. “With IFC’s help, we will build a modern
secured-transactions system, which is critical financial infrastructure
to help small businesses expand and create jobs. Anyone with internet access
can use the collateral registry from anywhere to register a pledge-notice
or make a search. With this, citizens and legal entities can access state
services without any bureaucracy and difficulties. A key objective in 2017
of the Ministry of Justice and Home Affairs is to bring government services
closer to Mongolian citizens. This web-based pledge-notice registry system
is in line with this objective.”
“We are pleased to see this system go live
today,” said Tuyen D. Nguyen, IFC Resident Representative in Mongolia.
“IFC will continue efforts to strengthen Mongolia’s financial infrastructure
to facilitate lending secured by movable assets and access to finance by
SMEs.”
Previously, IFC has helped develop modern
secured-financing systems in more than 20 emerging markets, including China,
Ghana, and Vietnam. In China, more than $3 trillion in loans backed by
movable assets as security have been granted since 2007; many beneficiaries
are small businesses.
About IFC
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 six decades of experience to create opportunity
where it’s needed most. In FY16, our long-term investments in developing
countries rose to nearly $19 billion, leveraging our capital, expertise
and influence to help the private sector end extreme poverty and boost
shared prosperity. For more information, visit www.ifc.org.
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