With support from the International Finance Corporation (IFC), a member of the US-based World Bank Group, Zambia recently passed the “Personal Property Security Interest Act”, a law that aims to allow small and medium-sized enterprises (SMEs) to use movable collateral such as equipment, machinery and inventory to access loans. Supporters of the law hope it will “generate USD 2 billion in financing to firms and benefit 6,500 SMEs, 1,200 micro enterprises and 1,200 women entrepreneurs” by 2020.
Elaine MacEachern, who serves as a Global Specialist in Secured Transactions and Collateral Registries for the World Bank Group’s Finance and Markets Global Practice, said, “The enactment of this law is a critical first step in developing a secured lending framework in Zambia that protects the rights of all types of regulated financial institutions, microfinance institutions, and leasing companies, encouraging them to provide financing secured by moveable collateral. To ensure this framework is complete, we must continue working with the Government of Zambia to build an online personal property security registry system.”
As of 2015, IFC has 184 member countries that drive its policies and approve disbursements, and it reported total assets of USD 87.5 billion, net income of USD 445 million and return on assets of 0.5 percent.
By Jason Wei, Research Associate
Sources and Additional Resources
About the International Finance Corporation (IFC)
The International Finance Corporation (IFC), a member of the US-based World Bank Group, offers loans, equity investments, technical assistance, and advisory and risk mitigation services to private companies with the intent of alleviating poverty and promoting open and competitive markets in developing countries. As of 2015, IFC has 184 member countries that drive its policies and approve disbursements, it and reported total assets of USD 87.5 billion and net income of USD 445 million.
[1] IFC Helps Zambia Expand Access to Finance with New Secured Transactions Law, http://www.finchannel.com/~finchannel/index.php/business/57688-ifc-helps-zambia-expand-access-to-finance-with-new-secured-transactions-law
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