KOROR, PALAU - The Asian Development Bank (ADB) welcomes the passing of a new Secured Transactions Act in Palau, which will make it easier for local people to conduct business in the island nation. ADB supported the drafting of the Act, which was prepared following extensive consultations.
"The new law will allow loans to be secured by offering moveable assets such as boats, cars or farm equipment as collateral, making it easier for people to secure a loan to start or grow a business," said Andrea Iffland, Regional Director of ADB's Pacific Liaison and Coordination Office in Australia.
The Act was introduced as part of the Government of Palau's plan to boost business development by modernizing business laws and increasing access to finance opportunities. Adequate access to financial services is a major constraint to economic growth in Palau and the rest of the Pacific region.
ADB's assistance was funded largely through its Private Sector Development Initiative, which started in 2006 with co-financing from the Australian Government. The initiative supports efforts by ADB's developing member countries in the Pacific to encourage private sector-led, sustainable economic growth.
ADB will continue to assist the Government of Palau as it implements the new law, including the installation of an electronic registry available to the public via the Internet, which will promote business and consumer credit by reducing transaction costs for borrowers. Since the registry will be a transparent, reliable record of transactions, it will help prevent conflicts among creditors.
Other ADB-supported secured transactions reform initiatives are also being implemented in Marshall Islands, Papua New Guinea, Solomon Islands, Tonga, and Vanuatu.