In the process it will also make it easier for many businesses to access credit.
The business registry was launched by the Minister for Treasury Patrick Pruaitch at a breakfast hosted by the PNG Chamber of Commerce and Industry at the Crowne Plaza Hotel.
"Access to credit allows new businesses to be formed and existing businesses to innovate and expand, spurring the creation of jobs and wealth," regional director of ADB’s Pacific liaison and co-ordination office in Sydney Andrea Iffland said.
"The registry is the final step in the creation of a new legal framework designed to promote commerce within PNG by simplifying and safeguarding lending processes."
The framework, Iffland added, will advance PNG’s economic development by allowing business people and entrepreneurs to unlock the value of ‘dead capital’ and use it in ways that will help grow the private sector.
It is underpinned by the Personal Property and Security Act, which was passed by Parliament in 2011.
This important reform was led by the PNG Department of Treasury with support from ADB’s Pacific Private Sector Development Initiative
Through the online registry, lenders can secure their claim on assets borrowers have pleaded as collateral and verify the same asset has not been pledged elsewhere.
Moreover, under the new framework lenders will often not require the services of a lawyer and a court order to repossess a pledged asset in the event of non-repayment.
The convenience and accessibility of the registry will also encourage non-bank suppliers, such as wholesalers, agricultural stores and vehicle dealerships, to extend credit, as this can now be secured against their customers’ business assets or outputs.
PSDI is now assisting the Government of PNG to raise awareness of the new system among both lenders and potential borrowers.
PSDI works with ADB’s 14 Pacific developing member countries to improve the enabling environment for business and to support inclusive, private sector-led economic growth.
It is co-financed by ADB and the Governments of Australia and the New Zealand.