views
or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of
Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in
this paper and accepts no responsibility for any consequences of their use. Terminology used may not
necessarily be consistent with ADB official terms.
1. Why
WBG/IFCs Focus
on Secured
Transactions?:
Clear Market
Failure in East
Asia Pacific
1. Why is IFC
Focusing in this
Area?: Clear
Market Failure
COLLATERAL GAP
Mismatch between assets owned by companies and
collateral required
Capital Stock of Firms
22%
27%
73%
34%
Vehicles/machinery/equipment
Movable property
Accounts Receivable
Land / Real Estate
Source: World Bank Enterprise Surveys
South Asia
Sub-Saharan Africa
3
Source: World Bank Doing Business 2014
59
OECD
31.2
1.7
0.6
South Asia
19.7
2005
9.9
2014
7.7
3.5
Sub-Saharan Africa
37.5
33.4
9.6
66.7
5.9
10
20
30
40
Percent of Adults
50
60
70
80
Lack registry of
security interests in
movables
Lack interest
Restrictions on types of
assets
Dysfunctional Registry/
No Registry
Lack of publicity
No competition in the
lending markets
Enforcement issues
No transparency
2. Potential
Impact of Secured
Transactions
Reforms in Access
to Credit
INCREASES MARKET
COMPETITION
- Development of
industries
(factoring and
leasing)
- NBFIs
- Better
interest rates
- Move from
informal to
formal financing
- Cost savings for
businesses
- Credit risk
diversification:
immovable and
movable
- Sector
diversification in
the portfolio
10
PROMOTES CREDIT
DIVERSIFICATION
Variable
Effect
Access to finance
8 percentage points
Access to a loan
7 percentage points
% of working capital
financed by banks
10 percentage points
Interest rates
3 percentage points
Loan maturity
6 months
Study also provides evidence that the impact of the introduction of movable
registries on firms access to finance is larger among smaller firms, who also
report a reduction in subjective, perception-based measure of finance
obstacles.
11
3. IFCs Secured
Transactions
Programs:
Business and
Delivery Model
Bank Accounts
Accounts receivable
Durable consumer
goods
Intellectual Property
rights
Vehicles
MONITORING
IMPACT &
COMMUNICATION
S
CREATION OF
ELECTRONIC
REGISTRY
1. Create Committee
2. Draft new STCR
Law
3. Raise awareness
4. Submit Law to
Parliament
5. Draft regulations
6. Revise Central Bank
regulations
1. Develop M&E plan
including baseline
information
2. Conduct periodic
monitoring of impact
through registry
indicators & surveys
3. Independent
evaluations
4. Communications
1. Support drafting of
technical specifications
2. Support
procurement process
3. Support operation of
the registry
4.Training/awareness
1. Training and
awareness raising
stakeholders (public &
private stakeholders),
including law and
registry
2. Technical training
to industry players
BUILDING THE
CAPACITY OF
STAKEHOLDERS
Registry
Regulations
Functional
Approach
Stand Alone ST
Law and
harmonization
with other laws
(insolvency,
leasing, etc)
15
Enforcement
Effective
Secured
Transactions
System
Priority
Creation
Publicity /
registration
Eligible Collateral
Standardized
Approach
IRB Approach
18
4. Global
Portfolio and
Impact on
Reforming
Jurisdictions
AFRICA
MENA
Ghana
Liberia
Malawi
Rwanda
Zambia
Nigeria
Afghanistan
Jordan
Lebanon
UAE
West Bank &
Gaza
Morocco
Pipeline
EAST ASIA
& PACIFIC
SOUTH
ASIA
ECA
LAC
Cambodia
PRC
Lao PDR
Mongolia
Philippines
PRC
Indonesia
India
Bangladesh
Sri Lanka
Azerbaijan
Belarus
Uzbekistan
Colombia
Costa Rica
Haiti
Regional West & Central Africa, South Sudan, Egypt, Nepal, Belize, El Salvador
20
21
http://www.youtube.com/watch?v=5c84WF02_IY
GHANA
MORE THAN US$ 10 BILLION IN FINANCING
30,000 MICRO BENEFICIARIES AND 10,000 SMEs
60,000 + REGISTRATIONS
GHANA
Supply Chain Financing: CAL
BANK Developed a local supply
chain for mining
corporations, through local
SME service providers
Impact
100 + local SMEs received > USD$
10 million. Created hundreds of
new jobs.
Movable assets (contracts,
receivables, equipment) as
collateral
No defaults in 30 months
23
AFGHANISTAN
1. Law reform
and new
centralized
online registry
(October 2011)
MEXICO
3. Loans secured
with movables
have multiplied
by 4
4. 45% of the
loans to the
agricultural
sector and 95%
to SMEs
2. Over 150,000
loans have been
registered for a
total secured
amount
estimated at
over USD$200
billion
5. Businesses
have saved US$4
billion in fees
25
PRC
RESULTS
MORE THAN US$ 4 TRILLION IN FINANCING
MORE THAN 100,000 BENEFICIARIES SMEs
600,000 + REGISTRATIONS
26
44%
13% 0%
52%
8% 0%
60%
4%
36%
69%
23%
42%
40%
23%
18%
Somewhat Important
8% 0%
28%
45%
57%
18%
0%
Very Important
4%
44%
52%
4%
6%
100%
Not Very Important
Not At All
Growth in business
43
21
Note: Respondents can choose more than one reason. This result
holds across location, sector, firm age and firm size.
Source: 126 enterprises surveyed in Beijing, Chengdu, Hangzhou, Wuhan and Zhengzhou, out of which 100 are SMEs. 29
Employment creation
Increase in sales
Effect on NPLs
Increase in investments,
exports
More than 100 local SMEs have received more than US$ 10 million.
Created hundreds of new jobs.
SMEs use movable assets (contracts, receivables, equipment) as
collateral
No defaults in the 30 months that program has been operating
Indicators
All
13
1770
4065
28.79 Billion AF
1178
170
59
29
35
1452
15
1US$ = 50 AF. 28.79 Billion AF = $575 million
32
6. Reform Challenges
and Lessons Learned
LESSONS LEARNED
1
2
THANK YOU
Elaine MacEachern
Global Product Specialist, WBG/IFC Secured
Transactions
emaceachern@ifc.org