Marco jurídico en el que se desarrolla la formación y la profesión de Arquitecto

Registries Projects

Finally, the project team will have to measure the impact, which is the desired final change and is normally associated with the development impact, which includes higher productivity, greater income and economic growth. For any project related to improving access to finance, including secured transactions and collateral registries projects, the correlation between the project outputs and outcomes and the project impact (economic growth,

higher productivity, increased employment, etc) is not easy to demonstrate. Therefore, while the project should aim at achieving development impact, the main objective should be to improve access to credit by establishing a new secured transactions legal framework and a collateral registry. The indicator that better reflects this objective is provided in Table 16.

Box 47 provides information about some of the results measured by IFC Advisory Services in its secured transactions project in China. The results were measured using the above methodology with some specific adjustments.

Expected Project

Component/Activity Outcome Indicators Measuring Tool (Data Source)

3. Enabling Stakeholders to Use New Secured Transaction Systems Efficiently (continued)

Outstanding Loans

Number of all outstanding loans •

[BASELINE] [TARGET]

Value of all outstanding loans (US$) •

[BASELINE] [TARGET] Loans Disbursed

Number of all loans disbursed secured by movable collateral •

[BASELINE] [TARGET]

Value of all loans disbursed secured by movable collateral •

(US$) [BASELINE] [TARGET] Other

Number of entities that implemented recommended changes •

[BASELINE] [TARGET]

Increase in percentage of loans guaranteed by movable •

collateral [BASELINE] [TARGET]

Increase in diversification of lending portfolio •

[BASELINE] [TARGET]

Table 16: Impact Indicators for Secured Transactions and Collateral Registries Projects

Expected Project Component/Activity Impact Indicator Measuring Tool _{(Data Source)}

1. Review of Legal and Institutional Framework

for Secured Transactions Increased Financing• Value of financing facilitated by advisory services (US$) [BASELINE]

[TARGET]

Value of financing to SMEs •

[BASELINE] [TARGET]

Number of SMEs benefiting from •

new financing mechanisms [BASELINE]

[TARGET]

Baseline Survey

Doing Business Report (Legal

Rights Index) Registry Data Program records

Data on Lending Volumes from Creditors

Data from Central Bank

2. Creation of Secured Transactions Infrastructure: Movable Collateral Registry 3. Enabling Stakeholders to Use New Secured Transaction Systems Efficiently

Source: International Finance Corporation

Box 46: Secured Transactions Reform in Vietnam : On the Right Path to a Modern Secured Financing System

In 2006, IFC conducted a diagnostic of the secured transactions system in Vietnam and provided a report with recommendations to the Ministry of Justice on how to modernize the system. As of 2009, the Ministry of Justice has implemented, with the support of IFC, a number of these recommendations (including the passing of a new Secured Transactions Decree) and is currently working on the creation of a new electronic web-based movable collateral registry. The reforms introduced have already produced a substantial positive effect in the financial sector in Vietnam through:

• Improvement of the secured transactions legal framework with the promulgation of the Secured Transactions Decree (published in the official gazette in January 2007), which enhances creditors and debtors rights by increasing the scope of assets that can be used as collateral, making registration of security interest easier, protecting secured creditors, and by establishing a clear priority scheme in case of default and facilitating enforcement mechanisms. • An increase in the number of registrations in the National Registry of Secured Transactions (NRAST), from 43,000

in 2005 (when the project started) to 120,000 by the end of 2008, which confirms that financing against mov- ables has certainly increased after the reform. NRST has also confirmed that 3,200 searches on existing security interests were done in 2008.

• Improved access to credit for businesses as reported by the Doing Business 2008 report, in which the Legal Rights Index indicator that measures the strength of secured financing systems was increased from 4 to 7.

• Vietnamese stakeholders (including public sector and private sector/financial sector representatives) have increased their awareness about the new secured transactions system. The program has facilitated training through workshops to more than 200 practitioners and different stakeholders.

Box 47: Impact of Secured Transactions Reform in China

Since 2004, China has embarked upon a reform of its movable collateral framework with support from the BEE and A2F Business Lines of IFC. The goal of reform was to encourage financing against valuable movable assets such as inventory and receivables. This was particularly important for China’s large number of SMEs, whose assets are mostly in the form of inventory and receivables and who reported access to credit as their most significant business constraint.

Secured Transactions legal framework: Until 2007, secured financing in China was governed by the Security Law, which allowed giving security interests in very few types of movable assets. In 2005, the People’s Bank of China (PBOC), in collaboration with the IFC team developed detailed recommendations for reforming the legal system, including the adoption of modern secured financing law in the Property Law, China’s first comprehensive law on ownership. The involvement, from an early stage, of the National People’s Congress (NPC) Legislative Affairs Commission – for which a study tour of movable collateral registries in the USA and Canada was arranged – proved crucial in garnering support from this key stakeholder.

As a result, in March 2007, the NPC passed the historic Property Law, which adopted a number of important principles of modern secured transactions laws. The chapter significantly improves the legal framework for asset-based finance in the country and is expected to put in circulation over US$2 trillion of movable assets. Major improvements under the law include:

• Expanding the scope of movable collateral by adopting a single unitary security interest which applies to movable property of all kind, tangible and intangible, present and future, eliminating the positive list of assets that can be used and allowing all types of movables as collateral.

• Simplifying the formalities required for creating security interests and improving the publicity of the system by: al- lowing notice registration, eliminating the need to register the security agreement; allowing any person, natural or legal, to give a security interest; creating an electronic registry of security interests allowing public on-line access to information on security interests.

• A more transparent priority scheme for secured and unsecured creditors, by incorporating specific rules about prior- ity by date of registration, rules on proceeds, buyers of collateral, special priority rules or super-priorities, etc.

Registry for pledges of receivables: With IFC’s support, in October 2007 the PBOC Credit Reference Center (CRC) created a national on-line registry for pledges of receivables and inventory, the first of this kind for China. The new receivables registry is easy to use and efficient, incorporating all the key features of a modern movable collateral registry. In conjunction with the launch of the registry, the PBOC also issued receivables registry rules which have adopted modern collateral registry principles. As of June 2009, the Credit Reference Center has reported an impressive impact:

• Over 75,000 registrations of security interest in receivables, representing loans with a value estimated at over US$570 billion. • Of the US$570 billion in financing, US$240 billion or 40% of the total corresponds to SME financing. • More than 100,000 searches on existing pledgers over receivables have been performed in the registry. • The number of SMEs that are registered as secured debtors in the AR registry is around 40,000. • The percentage of movable-based lending in China went from 12 percent, pre-reform and prior to the creation of the receivables registry, to 20 percent after the creation of it.

• The use of receivables as collateral has led to the development of a factoring industry in the country. The value of domestic factoring has reached a volume of US$ 21 billion.

Source: FIAS, International Finance Corporation

• Among the registry’s 5,000 users are banks, guarantee companies, law firms, finance companies and pawn shops. The user experience with the registration system has been overwhelmingly positive.

Remaining challenges: These efforts to expand the scope of permissible movable collateral under the Property Law and to improve the movable security registry have opened the door for the development of a modern secured financing system in China. However, a few challenges remain:

(i) The Property Law remains vague in a few areas, notably rules regarding registration, given the parallel system of registries that exist. The Property Law fails to consolidate more than 15 movable collateral registries into a single nationwide system. The IFC project only focused on creating an electronic registry for security interests in receiv- ables, but could not focus, due to lack of political support, on centralizing all types of secuirty interests on movable assets into one single electronic registry, by unifying the 15 registries for machinery, equipment and inventory. The result of this is that, at the moment, receivables are registered in PBOC’s new electronic registry created with the support of IFC, but the rest of security interests on movable assets (machinery, equipment and inventory) are registered in 15 decentralized registries, including the Administration of Industry and Commerce (AIC). The issue with this is that not all the information on pledges of assets is contained in a single depository, where financial institutions can search for existing pledges. In addition to this, the 15 decentralized registries are not accesible on- line and, therefore, the search for existing pledges in real time is not possible, creating additional risks to financial institutions when lending accepting movable assets as collateral. In the second phase of this project IFC will focus on working with the State Council (responsible for the 15 decentralized registries) in trying to merge all the regis- tries into one and make the information available on-line to users.

(ii) The enforcement process remains court-oriented, while private enforcement or out of court enforcement is not permitted. The critical issue of how to improve the judicial enforcement process is still left primarily to the judicial system to address.