Lahore: The Securities & Exchange Commission of Pakistan (SECP) recently announced its decision to establish a ‘Secured Transaction Registry’ (STR) for financing Small & Medium Enterprises (SMEs), according to a news source. As per the publication, the STR will work on a national level and enable SMEs to secure credit from financial institutions.
According to the information available, the STR project is expected to help small borrowers, especially from the SME and agriculture sectors, to secure credit from financial institutions. They will receive loans against their moveable assets like intellectual property, agricultural produce, motor vehicles, petroleum or minerals, receivables, and inventory.
As per a report, most SMEs don’t own real estate and developing countries don’t accept movable properties as collateral due to lack of a legal framework. This, in turn, makes it difficult for the SMEs to obtain affordable credit. This condition also limits the lending opportunities of financial institutions.
Therefore, the establishment of the STR will make lending
easier for both SMEs and banks. It will also help reduce risks and costs — improving
business and investment in the country.
