Registry makes lending against movable property easier
Lending institutions in Samoa will be able to provide credit to more businesses following the launch of an online registry that makes it easier to accept movable property — such as machinery, accounts receivable, or inventory — as collateral.
Activation of the Personal Property Securities Registry in Apia yesterday was the culmination of an extensive reform to establish a personal property securities framework in Samoa, through which security interests in movable property can be safely and easily recorded.
The reforms were supported by the Asian Development Bank’s (A.D.B.) Pacific Private Sector Development Initiative (P.S.D.I.).
“Access to credit is a critical driver of economic growth. It allows new businesses to form, successful businesses to grow, and jobs and wealth to be created,” said Masud Nizami, Financial Sector Specialist with A.D.B.’s Pacific Liaison and Coordination Office.
“With limited land ownership in Samoa, using movable property as security for loans makes sense — it makes credit possible for all businesses with assets and it ‘unlocks’ the value of these assets to help grow the private sector.”
Lenders can use the online registry to secure their claim on assets borrowers have pledged as collateral and verify that the asset has not already been pledged elsewhere. Moreover, under the new framework, lenders can repossess a pledged asset in the event of non-repayment without needing a lawyer and a court order.
It is expected that the convenience and accessibility of the registry will also encourage non-bank suppliers — such as wholesalers, agricultural stores, exporters, and vehicle dealerships — to extend credit, as this can now be secured against their customers’ business assets or products
The registry was launched by Tuifa'asisina Misa Lisati Leleisiuao Palemene, Samoa's Associate Minister of Commerce, Industry and Labour, at an event attended by government and private sector representatives and the Australian and New Zealand High Commissioners to Samoa. P.S.D.I. is now working the Government of Samoa to raise lenders’ awareness of the new system and encourage the creation of new lending products.
P.S.D.I. is a technical assistance facility cofinanced by the Government of Australia, the Government of New Zealand, and A.D.B.
It supports A.D.B.'s 14 Pacific developing member countries to improve the enabling environment for business and to support inclusive, private sector-led economic growth. The support of the Australian and New Zealand governments and A.D.B. has enabled P.S.D.I. to operate in the region for almost 10 years and assist with more than 280 reforms.