Optimizing Access to Finance in Indonesia Through Improvement of the Movable Collateral Framework...
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Transcript of Optimizing Access to Finance in Indonesia Through Improvement of the Movable Collateral Framework...
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Presented in:
Financing SMEs: Sharing Ideas for Effective Policies Capacity Building and Training Workshop, Jakarta, 15 October 2014
OPTIMIZING ACCESS TO FINANCE IN INDONESIA THROUGH IMPROVEMENT OF
THE MOVABLE COLLATERAL FRAMEWORK & REGISTRATION SYSTEM
The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policiesof the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or thegovernments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts noresponsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB officialterms.
The views expressed in this presentation are the views of the author and do not necessarily reflect the views or policies of the Asian Development Bank Institute (ADBI), the Asian Development Bank (ADB), its Board of Directors, or the governments they represent. ADBI does not guarantee the accuracy of the data included in this paper and accepts no responsibility for any consequences of their use. Terminology used may not necessarily be consistent with ADB official terms.
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About this Presentation
Modernization of the Movable Collateral (Fiducia) Framework and Registry in
Indonesia
Reform Results
What Lies Ahead
1
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The Need to Improve MSMEs Access to Finance
DEMAND SUPPLY GAP (IDR TRILLION)
2 Source: IFCs Market Study on Movable Asset-based Financing to SMEs in Indonesia, January 2014
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Law 42 of 1999 on Fiducia Security
Encumbrance must be set forth in a notarial deed Only one security may be registered over a particular item at any
time. Registration grants the fiduciary recipient priority rights Registration certificate is issued on the day of receipt of application
Government Regulation
Number 86/2000
Presidential Decree Number
139/2000
Regulates fiducia registration procedure and cost of deed Registry reviews completeness of the application Sets maximum cost for deed of fiducia security Registration fee stipulated by ministry
Legal Framework Supporting Movable Collateral Registration in Indonesia
Establish Regional Registry nationwide Delegates authority to issue registration
certificate to Regional Registry
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Objects of Fiducia Registration
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Accounts receivable Inventory Equipment and machinery Crops and fertilizers Commodities Livestock Negotiable instruments, etc.
Law No. 42 of 1999 on Fiducia Security:
movable assets, whether tangible or intangible immovable goods that are not subject to - Security Rights (Hak Tanggungan)
- hypothecs on ships with gross tonnage of 20 M3 or more
- hypothecs on aircraft
- pledges
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Pre-Reform: Manual Process for Registration (Standard Practice)
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In operation since year 2000
Manual and decentralized
process through 30 Fiducia registration Office (regional level) & 157 Satellite Offices nationwide
No centralized database & difficult to access
Cost relatively high
Not attractive to businesses contributing to low level of compliance
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Evolution of the Fiducia Registry
Enactment of the Fiducia Law (Law No. 42/1999)
Establishment of the first Fiducia Registry at the Ministry level
1999
2000 Minister of
Finance Decree 130/2012 (mandatory registration for multi finances)
Ministrys Working Group for Fiducia Reform
2012
2013
2014
Business as usual operationalization of Fiducia Registry low compliance level
International Best Practice (Chengdu, Beijing)
2001-2011
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Enactment of the Government Regulation 86/2000
Enactment of Presidential Regulation139/2000
Establishment of the Provincial Fiducia Registry
Intl Best Practice (Australia, Canada, New Zealand)
Fiducia Online v. 1 Launched
Supporting Ministerial Regs
Some digitization initiatives at Regional Registries
Fiducia Online v. 2 Launched
Plan for Database Digitization
Drafting of the amendment to Government Regulation 86/2000
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Fiducia Online: Paperless Registration
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Fiducia Online: Paperless Registration
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Registration Certificate: 7 Minutes
Scan barcode for
authentication
purpose
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Centralized Database Search Function
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Results So Far
Clear and transparent data available on real time basis
Registration is consistently high
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250,000
500,000
750,000
1,000,000
Fiducia Registration March 2013-September 2014
average 655,826 /month | max 966,883 application/month
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Results So Far
Wide Range of Objects
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Vehicle 2W 79.05%
Vehicle 4W 19.94%
Vehicle Others 0.63%
Farms Equipment
0.00% Heavy Equipments
0.02%
Stock 0.00%
Obligation 0.00%
Other Assets 0.04%
Cattle 0.00%
Company Assets 0.13%
Others 0.18%
Vehicle 2W 4.901.852
Vehicle 4W 1.236.643
Vehicle Others 39.109
Farms Equipment 80
Heavy Equipments 1.464
Stock 10
Obligation 32
Other Assets 2.552
Cattle 59
Company Assets 7.960
Others 11.145
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Improved Performance & Value Add
Significantly improved Service Quality
(awarded as one of Top 9 National Public Service Innovation 2014)
Potential to provide better Access to finance by
Enable Creditor to have better information about priorities prior making decision
Improve Legal Certainty in creditors priorities
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Reform Continues..
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Legal Framework
Improvement
Enhancement to Fiducia Online & Finalize
Transition
Public Outreach
Payment Gateway
Mechanism
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THANK YOU
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