Nepal, March 10, 2008—
IFC and the World Bank are collaborating with Nepal’s Ministry of Finance and the Credit Information Bureau to establish a secured, state-of-the-art transactions registry. This will allow banks to lend more against moveable assets, reducing the requirement for collateral and increasing access to finance for borrowers, especially small and medium enterprises with limited assets.
“Access to finance is a critical obstacle facing smaller enterprises in this region. IFC is committed to supporting the implementation of innovative systems and infrastructure to help address this challenge,” said Rajeev Gopal, IFC Operations Officer in Nepal.
A new Secured Transactions Act was introduced in 2005 in Nepal to facilitate the use of moveable assets as collateral. Among other advancements, the act calls for a centralized, electronic registry to file pledges on moveable assets. After the registry has been established, the act will become operational.
IFC and the World Bank have conducted a feasibility study to provide guidance on the details of the registry’s design, operations, and business model. Last month, key stakeholders came together to discuss the study’s findings and recommendations, which include implementing the project as a public-private partnership. Under this arrangement, the Ministry of Finance will create the new registry office, and the Credit Information Bureau will be responsible for day-to-day operations.
The registry will be an English-language, Web-based system that will allow lenders to record pledges on moveable assets, including motor vehicles. Before going live, the government will appoint a committee to draft the registry’s regulations. There will be training sessions for lenders and the legal community, as well as awareness-raising campaigns for the public during this implementation phase.
The Nepal Bankers Association, lenders, and financial institutions have expressed strong support for the initiative and will be involved in the planning and implementation phases. The whole process is expected to take a year.
About IFC
IFC, a member of the World Bank Group, fosters sustainable economic growth in developing countries by financing private sector investment, mobilizing private capital in local and international financial markets, and providing advisory and risk mitigation services to businesses and governments. IFC’s vision is that people should have the opportunity to escape poverty and improve their lives. In FY07, IFC committed $8.2 billion and mobilized an additional $3.9 billion through syndications and structured finance for 299 investments in 69 developing countries. IFC also provided advisory services in 97 countries. For more information, visit
www.ifc.org
.