IFC secured transactions advisory project in China

In 2004, the People’s Bank of China (PBOC) recognized wide spread financing difficulties among small andmedium enterprises (SMEs) and requested technical support from IFC in the modernization of China’s Secured Transactions system. The main objective of IFC’s Secured Transactions Advisory Project in China was to increase access to credit to firms, especially SMEs, by developing an appropriate legal and institutional framework to allow and facilitate the use of movable assets such as receivables as collateral for loans. This was particularly important forChina’s large number of SMEs, whose assets were mostly in the form of equipment, inventory and receivables and who reported access to credit as their most significant business constraint. The Project has successfully fulfilled its objective of establishing a solid secured transactions system that has resulted in a sustainable flow of additional credit to the SME sector.