Individual consumers and Micro, small and medium-sized enterprises (MSMEs) are set to get benefits from the creation of an electronic registry. It will permit the financial institutions of Pakistan to use moveable assets like agricultural produce as collateral for loans.
Securities and Exchange Commission of Pakistan (SECP) has moved to launch the collateral registry, supported by IFC that is the World Bank Group. World Bank Group undertook it as part of work in 2015 in order to boost access to finance in Pakistan. It comprises of the changes to improve the country’s legal and regulatory framework for secured dealings, Pakistan is doing business reform initiative.
This establishment will be beneficial for MSMEs service providers, like; leasing companies and microfinance institutions for registering rights in moveable assets in small and medium-sized enterprises and also in offering credit to people.
According to chairman SECP Aamir Khan, the secured transaction registry would be improving the access to finance for micro, small and medium businesses and also, this initiative will be beneficial in meeting the getting credit. SECP has started its work for the next year to strive 100 percent coverage in Pakistan at the forefront of “getting credit” that is reformed in South Asia.
Nadeem Sadiqqui, the IFC’s country manager of Pakistan said that this move represents a significant milestone for Pakistan that has come at the time when the micro, small, and medium-sized enterprises of Pakistan are unfavorably affected by pandemic COVID-19.
The work of IFC would now be focusing on assisting and supporting the Pakistani government mainstream the reform to all its beneficiaries. It will also help in developing the market for moveable asset-based lending. IFC has already trained more than 100 representatives from financial institutions in collaboration with SECP and SBP from financial institutions via online sessions on the online collateral registry and on the secured transaction regime. IFC hopefully will continue online training amid the pandemic.
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