World Bank likes Commercial Collateral
The World Bank says Thailand's Commercial Collateral Act will support small and medium-sized enterprises, according to Commerce Ministry's Department of Business Development.
Pongpun Gearaviriyapun, director-general of the department, said the World Bank had applauded the Commercial Collateral Act for supporting businesses by facilitating easier access to capital and enhancing transparency in the financial sector with a business-security registration system.
The law's details have been changed to cope with the country's economic system and business operations.
The Commercial Collateral Act gained approval from the National Legislative Assembly on August 7 and will take effect 240 after the announcement date on the Royal Gazette. It is expected to come into effect next June.
With this act, more than 2 million out of the country's 2.8 million SMEs will be able to gain easier access to capital. About 280,000 SMEs, or 10 per cent of the total, are expected to benefit from the act in the first year of its enforcement.
Recently, the department set up a committee to supervise and monitor preparations for tasks of the Commercial Collateral Act.
One of the tasks involves establishment of a commercial-collateral registration office at the Department of Business Development.
Others include issuance of ministerial regulations, announcements and orders, and departmental announcements, and technology for real-time commercial-collateral registration, development of business-security enforcers and build-up of understanding to stakeholders - SMEs and financial institutions, and other parties for new alternative sources of capital, laws and rights.
The department also invited Elaine MacEachern, the International Finance Corporation's global specialist for secured transactions and collateral registries, as a special adviser for business-security registration and international practices.
MacEachern will advise on three international practices: design of the business-collateral registration process; development of the business-collateral registration system with information technology; and data collection, reports and analysis of business collateral for future policy interests.
Business collateral includes operations, claims, movable properties like machinery, inventories or raw materials, property from real-estate developers, and intellectual property.