By GEDION TIMOTHY
WESTPAC says the Personal Property Security Act is providing greater transparency and therefore making lending easier.
Westpac had welcomed the launching of the legislation and the online registry of personal properties by Treasurer Patrick Pruaitch in January.
The launching was followed by the activation of the online registry at the Investment Promotion Authority website in May.
The registry is the main implementation part of the legislation.
The purpose of the legislation is to make it easier for people to obtain finance from lending institutions.
When lending, financial institutions generally require security and traditionally look to a mortgage over land.
But this is difficult in Papua New Guinea because most land is clan-owned.
The legislation not only makes it easier for the bank to obtain security over “personal moveable assets” but also makes it more certain that the security will be available to the Bank should the borrower default.
“The move to a centralised registry has been a really positive one for everyone involved – lenders, borrowers, regulators and the courts,” a Westpac spokesperson said. “Recovering debt against moveable security used to be difficult, given that the location of assets was often unknown and correct legal ownership hard to establish.
“The PPSA Act and (online) registry provide greater transparency and therefore make lending easier.
“We were very pleased to work with the Asian Development Bank and the Central Bank throughout the process of implementing the Act and establishing the asset register for PNG.
“We’ve now loaded affected security to the online Property Security Registry and using it is just part of our standard business processes.”
Bank of South Pacific chief executive officer Robin Fleming said they had started working on the compliance requirements proactively and well before the launch active date.
By GEDION TIMOTHY