Ulaanbaatar, Mongolia, June 6, 2017
— IFC, a member of the World Bank Group, organized a Conference on Insolvency Reform together with the Ministry of Justice and Home Affairs (MOJHA). The event was organized under a new joint project of IFC and MOJHA to advocate for the importance of a good insolvency system for the financial industry and the economy and to exchange views and best practice with other reforming countries. The project aims to help Mongolia modernize its insolvency framework in order to resolve consumer and commercial debtor financial distress in more effective, efficient and responsible ways and thus promote entrepreneurship and financial stability.
To achieve this goal, the project focuses on strengthening the legal and regulatory framework by updating the current Bankruptcy Law; developing capacities and standards for the Mongolian insolvency professionals; and promoting non-judicial means of insolvency resolutions and improving debt collection standards, particularly those concerning consumer and SME debtors.
Around 100 international and local participants discussed the current practice and legislative framework on bankruptcy in Mongolia, the need for further reforms, essential international best practice and the experiences from the other markets. High level speakers from the neighboring countries such as Korea and China also joined the event and shared their reform lessons and insights in this area.
“Strengthening insolvency and bankruptcy legislation is one of the key objectives of the government’s plan to modernize the country’s legislative framework till the year of 2020 and also promote transparency, improve responsibility and liability and support entrepreneurship” said Bayasgalan G., State Secretary of MOJHA. “The official Working Group to work on revising the bankruptcy law was established in April of this year and as part of the immediate first step to understand the current situation, needs for the reform, and experiences from other countries, this important conference is being organized.”
“We are pleased to embark on this new initiative with our good partner MOJHA,” said Tuyen D. Nguyen, IFC Resident Representative in Mongolia. “Insolvency framework is a critical piece of financial infrastructure. It sets up the foundations for responsible debt collections, restructuring and write-offs by the creditors and promotes more efficient financial markets.”
This Mongolia project is being supported by a Korea Trust Fund in the World Bank Group. Effective insolvency system helps to reduce uncertainty and potential risks faced by the lenders and investors related to the debt collection and recovery process. IFC and the World Bank Group Finance & Markets Global Practice have considerable expertise and experience in this area. Vietnam, Lao PDR, Moldova, Mauritius and Latvia are among the countries that IFC has assisted with insolvency reforms.
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