10 May 2016

PNG moveable asset registry goes live, completing its secured transactions framework

More businesses will soon be able to access credit in Papua New Guinea (PNG) following the activation of an online registry that enables lenders to easily accept moveable property, such as vehicles, machinery or stock, as collateral.

“The activation of this registry completes a new framework for lending that is safe, convenient, and sustainable,” said Hayden Everett, Senior Country Specialist at the Asian Development Bank’s (ADB) Pacific Liaison and Coordination Office. “As demonstrated elsewhere in the Pacific, making moveable collateral viable for lenders results in the extension of credit to new categories of borrowers and unlocks the value of so-called ‘dead capital’.”

The registry, together with the Personal Property Security Act that underpins it, allows lenders to quickly and conveniently secure their claim on non-land assets pledged by borrowers as collateral. Once registered, lenders can easily repossess these assets in the event of non-repayment.

As well as allowing lenders to register their security interest in a pledged asset, the registry also allows them to verify the asset has not already been pledged to someone else. It is expected that the convenience and accessibility of the registry will also encourage non-bank lenders, such as wholesalers and supply stores, to extend credit, as this can now be secured against their customers’ business assets or outputs.

The registry was launched and a test version made available to the public in January this year. It went live this week following the official commencement of the Personal Property Security Act.

Creation of the registry and passage of the act was led by the Government of PNG’s Department of Treasury, with support from ADB’s Pacific Private Sector Development Initiative (PSDI).

PSDI has been helping the country’s financial institutions make use of the new framework by assisting them to transfer existing loans to the registry, and by advising them on new loan products they can now offer. PNG is the eighth Pacific country that PSDI has helped establish a ‘secured transactions’ framework.

The registry is managed by the Investment Promotion Authority and can be accessed at https://ppsrpng.com