21 May 2012

New law introduced in Palau making business easier

10:45 am on 21 May 2012

A new law has been introduced in Palau, making it easier for local people to secure a loan.

The Secured Transactions Act was drafted with the help of the Asian Development Bank or ADB to help people secure a loan with moveable assests such as boats, cars and farm equipment being offered as collateral.

A Legal advisor to the ADB under the Pacific Private Sector Development Initiative, Terry Reid says the law sets outs very clear rules to lenders and will increase access to finance.

"Businesses should find it easier and it should be cheaper. And certainly this system avoids perhaps you having to use lawyers as extensively before because lenders can create the interest themselves, they can file it on the register so the transaction costs goes down."

Terry Reid says a similar law is also being implemented in other parts of the Pacific including Tonga, Solomon Islands, Vanuatu and Papua New Guinea.