BSP chief executive officer Robin Fleming, said BSP was pleased to see the implementation of the act which would make it easier for consumers to obtain finance from lending institutions.
“Lending, financial institutions generally require security and traditionally look to a mortgage over land,” Fleming said
“But this is difficult in Papua New Guinea because most land is customary-owned.
“The Act not only makes it easier for the bank to obtain security over personal moveable assets, but also makes it more certain that this security will be available to the bank should the borrower default.
“Importantly, with this Act, not only is lending likely to increase, but that increased lending is more likely to go to those who in the past would have been denied a loan. Greater access to loan funding will have a positive spin-on effect on our economic activities particularly in the small to medium enterprise business segments.”
Fleming said legislation of this nature was being implemented throughout the Pacific region and it was pleasing to see that PNG would now be included.
Geoff Toone, the Westpac managing director, said the bank welcomed any move that provided greater transparency and made lending easier.
“We are already involved in lending against primary and secondary goods, though recovering debt against moveable security has traditionally been difficult given the location of assets is often unknown and correct legal ownership can be hard to establish,” Toone said.
“The move to a centralised registry is a positive one for everyone involved – for lenders, borrowers, regulators and the courts.
“We anticipate that once the registry is operational, there will be an increase in lending, especially in the small business sector. We have been pleased to work with the Asian Development Bank and the Central Bank throughout the process of establishing the centralised asset registry, and are now working to migrate affected security to the new registry.”
ANZ PNG managing director Mark Baker said: “We fully support the initiative which is an important step towards enhancing the financial system in Papua New Guinea and improving access to finance for the SME sector in particular.
“We look forward to its successful implementation.” The National