IFC praises VIB’s online registration for secured transactions

14:33 | 31/10/2012
On October 29, IFC specialists and a delegation from Lao PDR’s Ministry of Finance met with representatives from Vietnam International Commercial Joint Stock Bank (VIB) to discuss the benefits of the online registration system for secured transactions.

The online registration system has enabled local banks to quickly and conveniently register the security interests in movable collateral, helping considerably accelerate loan approvals to customers.

Since the launch in March 2012, online registration for secured transactions accounts for about 40 per cent of the bank’s total registration. This brings fold benefits to VIB to do faster loan disbursement, and secure the bank’s legal rights over movable collaterals. Therefore, VIB’s clients can have loans disbursed at the shortest time.

Speaking at the meeting, Elaine MacEachern, IFC’s secured transactions specialist for East Asia and Pacific, said, “IFC views the Vietnam Secured Transactions Project as a successful reform effort and demonstrates how financial sector reforms can be transformative.  In part the success of the project is due to the great support received from the various financial institutions and banks, especially VIB, during the system launch and ongoing operation.  The adoption of the registry system as a tool to manage banks risk can only be deemed successful if the financial institutions are utilising it to its full potential.”  

Tran Thanh Tuyen from Thuan Phat Investment and Industry Joint Stock Company in Hanoi, a client of VIB shared his thoughts on the online registration: “For a small and medium company like Thuan Phat, the rollout of this online registration helped reduce the required time and procedures, and more importantly, allowed us to use our future property as collateral and quickly get disbursement. Therefore, we can make best use of our resources and business opportunities against the current challenging economic backdrop.”

IFC has provided financial and technical support to develop the online registration system for secured transactions in Vietnam, one of the pioneer countries in the region. To build on the success of this project, IFC continues to support Lao government in developing a similar online registration system for secured transactions.

With IFC’s support, the online registration system for secured transactions managed and operated by the Ministry of Justice was launched in Vietnam on March 19, 2012.

The system has been well-received by banks as it allows them to inspect and register the security interests against moveable collateral and identify the validity timing of the secured transaction registration in a few minutes while previously taking several days with the paper-based registration system, thus help them confirm their payment priority for loans in borrowers’ default case.

This is very essential for banks to make a lending decision, thus facilitate capital flows, increase access to credit for enterprises and individuals, and strengthen the efficiency and safety of credit market operations.
 

By Hoang Anh

vir.com.vn

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