The UB Post
JUSTICE MINISTRY TO BOOST SME FINANCING WITH NEW REGISTRY
The International Finance Corporation (IFC) and Ministry of Justice and Internal Affairs launched a web-based movable collateral registry on February 20.
The registry, part of a joint initiative to reform Mongolian secured transactions, is aimed to improve access to finance for small and mediumsized enterprises (SMEs) by facilitating lending against movable assets as collateral. The Mongol Bank, Mongolian Bankers' Association, General Authority of State Registration and Intellectual Property, and other government agencies participated in the project.
IFC views the registry as a major milestone in their efforts to promote financing against movable assets in Mongolia as SMEs face challenges in obtaining bank loans due to lack of collateral.
Tuyen D. Nguyen, IFC Resident Representa- tive in Mongolia stated at the opening, “We are pleased to see this system go live today. IFC will continue efforts to strengthen Mongolia's financial infrastructure to facilitate lending secured by movable assets and access to finance by SMEs."
Deputy Minister of Justice and Internal Affairs B.Enkhbayar underlined support for SMEs and entrepreneurs as one of the top priorities of the government.
"With IFC's help, we will build a modern secured-transactions system, a critical financial infrastructure for helping 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, individuals and entities can access state services without any bureaucracy or difficulty. A key objective in 2017 of the Ministry of Justice and Internal Affairs is to bring government services closer to Mongolian citizens. This web-based pledge-notice registry system is in line with this objective," he added.
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.