LRA setting up new land registry system in May 2020 to boost MSMEs lending

The Land Registration Authority (LRA) is targeting to set up a new personal property registry system which will become a database of collaterals for lenders and financial institutions.

The idea is to boost lending to micro, small, and medium enterprises, the LRA said.

“We are developing the new registry,” LRA Deputy Administrator Ronald Ortile said in a press conference in Manila on Friday.

The LRA official said the implementing rules and regulation of the Personal Property Security Act, which took effect on Dec. 3, mandates the agency to implement the new registry in nine months.

However, he said, the LRA is envisioning to rollout the new registry in six months.

“We expect and hope to deliver ... by mid of May next year,” Ortile said.

The Personal Property Security Act (PPSA) of 2018 mandates the creation of a centralized notice registry which will provide electronic means for registration of personal property.

The PPSA aims to give micro, small, and medium enterprises greater access to credit through the use of personal property assets as collateral to borrow money.

“We are now developing the registry that will handle the notices on the collaterals that will be pledged to borrowers,” Finance Undersecretary Gil Beltran said in the same press conference.

“To get lenders to provide more loans to MSMEs, one of the means is setting up a secured transaction system which relies on more movable collaterals as means to encourage lenders to commit more funds to MSMEs. We were able to get the law passed last year,” Beltran said.

The Finance official said more needs to be done in giving small businesses access to credit since only about P550 billion in loans were taken by MSMEs, or about 6% of the total financial system. —VDS, GMA News