SUVA, FIJI – The Asian Development Bank (ADB) is deepening its re-engagement with Fiji, partnering with the government to improve access to credit and to secure a stronger financial sector through secured transactions reform.
Following meetings in January with Fiji’s Attorney-General and Minister for Finance Mr. Aiyaz Sayed-Khaiyum, ADB will assist the new Secured Transactions Reform Taskforce which held its inaugural meeting here today. The taskforce, which ADB will assist, brings together representatives from banks, credit unions, microfinance institutions, community groups and government agencies and will be chaired by the Governor of the Reserve Bank of Fiji, Barry Whiteside. It will provide government with a roadmap to implement secured transactions through new laws and the establishment of public online registries.
“ADB is encouraged by Fiji’s decision to embrace these reforms and is excited to be assisting in their implementation,” said Andrea Iffland, Regional Director of ADB’s Pacific Liaison and Coordination Office in Sydney. “Adopting a secured transactions framework will allow Fiji’s borrowers to use their movable assets as collateral for loans, and if loans go unpaid laws will be in place to ensure lenders have the certainty to easily enforce their rights over secured property.”
Like many Pacific countries, obtaining credit in Fiji is not easy. Secured transactions, or personal property securities frameworks, enable borrowers to secure credit by accessing the value of movable property—items such as vehicles, machinery, crops, inventory and accounts receivable, i.e. everything owned by an individual or a business, excluding land or buildings.
The Pacific Private Sector Development Initiative (PSDI) — a regional technical assistance facility cofinanced by ADB, the Government of Australia and the Government of New Zealand—will advise the taskforce. In a report in 2014, PSDI noted that secured transactions frameworks can help remove constraints to economic growth and access to finance in developing Pacific island economies.
PSDI has already supported the passage of enabling laws for secured transactions in eight of ADB’s Pacific developing member countries six of which have also established electronic registries for secured transactions: Federated States of Micronesia, Marshall Islands, Palau, Solomon Islands, Tonga, Vanuatu, Papua New Guinea, and Samoa.
ADB’s assistance for secured transactions reform is part of its broader thrust for private sector development in Fiji under its new 2014-2018 Country Partnership Strategy.
ADB, based in Manila, is dedicated to reducing poverty in Asia and the Pacific through inclusive economic growth, environmentally sustainable growth, and regional integration. Established in 1966, it is owned by 67 members—48 from the region.