Hafeez launches STR to enable financial institutions file security interests online

F.P. Report

ISLAMABAD: Advisor to the Prime Minister on Finance and Revenue, Dr Abdul Hafeez Shaikh Thursday formally launched the Secured Transactions Registry (STR) to enable financial institutions file security interests online.

The STR, established under the Financial Institutions (Secured Transactions) Act, 2016, for registration of security interests/charges created by entities other than companies on their movable assets, has been operationalized by the Securities and Exchange Commission of Pakistan (SECP).

The STR is an electronic register that can be accessed through a dedicated website by 24/7, said a press statement issued by the Finance Ministry, adding that the financial institutions could now file security interests online.

Registration process was fully automated and the registry was searchable by general public, free of charge, it added.

The launching ceremony was chaired by Dr Abdul Hafeez Shaikh and was attended by Governor of State Bank of Pakistan (SBP), Reza Baqir, Chairman of SECP, Aamir Khan, Chairman of Board of Investment, Atif R Bokhari, Chairperson of Karandaz Pakistan, Dr Shamshad Akhtar, CEO of Karandaz Pakistan, Ali Sarfraz, Department Head of International Development (DFID) Pakistan, Annable Gerry, Country Director of World Bank in Pakistan, Illango Patchamuthu, Commissioners of SECP, Shaukat Hussain and Shauzab Ali.

Speaking on the occasion, Dr Abdul Hafeez Shaikh appreciated the support offered by the British government, through DFID and Karandaz, and collaboration between Securities and Exchange Commission of Pakistan (SECP), SBP, Board of Investment and the World Bank for the successful implementation of this reform.

He particularly lauded the commitment demonstrated by the SBP and SECP teams, and the hard-work of the SECP for spearheading this initiative, and its completion within a year of its assignment to the SECP in March last year.

The advisor, while discussing the importance of this initiative, highlighted that Micro, Small and Medium Enterprises (MSMEs) play a vital role in the economic development of the country due to their significant contribution in terms of output, exports and employment.

Particularly, SMEs constitute approximately 90% of businesses in Pakistan, employ 80% of the non-agricultural labor force and contribute 40% in country’s annual gross domestic product (GDP).

He noted that despite playing a significant role in economic growth of the country, SMEs access to formal finance is limited to only 6% of the total financing by the banking sector.

The advisor was optimistic that this initiative would prove to be a game changer by improving the access to finance for the MSMEs, Agri borrowers and rural enterprises.

The commencement of the registry would broaden the scope of assets that these under-served segments can offer as a security for availing the finance.

On the other hand, this reform will also help banks to expand their lending portfolios while the operationalization of STR will contribute towards improving Pakistan’s score on ‘getting credit indicator’, and in particular raise its global ranking on the World Bank’s Doing Business’ index.

The launch of STR is yet another millstone achieved by the current government that is a testament to its commitment towards improving financial inclusion, growth of the private sector and ultimately, the economic development of the country.

In her address at the occasion, Annable Gerry, lauded the efforts of the financial sector regulators for their thought leadership and progressive role.

Dr Shamshad Akhtar also praised the SECP leadership and assured of Karandaz Pakistan’s continued support for the SECP’s technology projects while governor of SBP and chairman of SECP also spoke on the occasion.