|
 |
|
 |
| |
Company News
Registry plan no-go for lack of money
Thursday - 29th December, 2011 | www.ekantipur.com |
|
|
|
|
| |
The government’s plan to establish a secured transaction registry by 2011 did not happen as the required software could not be purchased.
The registry was expected to help potential borrowers without fixed assets to get loans by allowing them to put up movable property as collateral.
Traditionally, loans are provided only against immovable assets such as land and houses in Nepal. Bankers say there has been limited lending against movable assets, mainly gold and silver.
As the registry keeps records of collateral that has been put up to get loans, banks and financial institutions (BFI) can assess whether a potential borrower is creditworthy or not by looking it up. BFIs can also decide whether to extend further credit against the same collateral.
The software was supposed to be purchased with a loan from the World Bank under the financial sector reform programme but it was inadequate.
“The price of the software was higher than the budget we had under the programme,” said Bhaskarmani Gnawali, NRB spokesperson. “Now, the software has to be brought with the government’s own resources.”
An official related to the registry said that it had been allocated Rs 300,000 for the software but it cost more than that.
Meanwhile, the proposed registry has dropped in the government’s priority list as it has not been so successful in other countries. “Such registries exist in some 30 countries, and most of them were found not to be doing well,” said the official.
As a majority of the people have not been able to get credit from financial institutions for lack of fixed assets, the concept of the secured transaction registry was envisioned to help them.
In particular, rural people only have movable properties such as cattle and grain which they cannot use as collateral to get loans.
As the registry does not have its own infrastructure, it has assigned the Credit Information Bureau to implement the system for five years. The two sides signed an agreement last year in this regard.
Following the registry of collateral in the office, such assets cannot be sold until the concerned bank requests the registry office to lift the ban.
In addition to banks, even individuals can register their transactions with the CIB as per the Secured Transaction Act which will help in making claims for transactions that were not made through financial institutions. |
|
| |
|
|
 |
|
 |
|
|
