Reserve Bank of Fiji looks at ways to lift economy
The Reserve Bank of Fiji will look at developing more ways to lift the economic status of Fiji.
And RBF Governor Ariff Ali says one of the things that they had introduced is working towards the Personal Property Securities Act.
Mr Ali delivered on this during the 19thAttorney-General’s Conference at the InterContinental Fiji Golf Resort and Spa.
Mr Ali spoke about the positives of developing such a system.
“Legal and institutional framework to facilitate the use of moveable property as collateral for both business and consumer credit,” Mr Ali said.
“Loans backed by collateral are called secured transactions. Collateral is property with economic value. Property the lender can take if a borrower does not repay a loan.”
Collateral is a property or other asset that a borrower offers as a way for a lender to secure the loan. If the borrower stops making the promised loan payments, the lender can seize the collateral to recoup its losses.
Mr Ali also talked about the different types of assets that can be collaterilised.
“These include motor vehicles, livestock, crops, other tangible properties such as machinery, jewellery, bank accounts and intellectual property,” Mr Ali said.
He also gave examples of other countries that were already working with the Personal Properties Securities Act.
“Other countries that are using this include the Federated States of Micronesia, Republic of the Marshall Islands, Solomon Islands, Vanuatu, Australia, New Zealand, Tonga, Papua New Guinea, Palau and Samoa are some.”
He explained the benefits of having such an Act would create more benefits for loan institutions.
“Increase access to credit, unlock the value of moveable property, Powerful tool for people that do not have land holdings, reduces cost of credit, better interest rate, move from formal to informal, cost savings for businesses, credit risk diversification, immovable and movable, increase market competition, Development of industries in factoring and leasing.”
Mr Ali said this would boost Fiji economically.
“Increase access to credit which would increase overall economic activity,” he said.
Edited by Ranoba Baoa
Feedback: lusiana.banuve@fijisun.com.fj
