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Access to credit is acknowledged as being essential for economic development. Entrepreneurs and businesses need financing for realization and expansion of economic activities that will again result in new jobs and generate revenues for both employees and the businesses. For businesses, funds will be needed for initial investments like machinery, working capital including operating costs and salaries, financing of inventories and/or receivables; all related to the activities for creating the products or services generating the business revenues. Often the average consumer will also have the demand for some kind of financing when buying high-value items like cars, etc.
Access to credit is mostly a function of the supply in the market place, while terms and conditions vary with the general inflation, costs of administration and risks involved. A secured credit where the credit provider has some kind of security for being repaid represents a reduced risk compared to an unsecured credit to the same borrower, even if his activity represents the same business risk. Stronger security means lower financial risk.
Without an efficient framework in place which leaves the creditors with the trust and comfort for the creation, the perfection and eventually the enforcement of a secured interest, creditors will either increase the price of credits to adjust for the additional risk - or not provide any credit at all.
The Secured Transactions Register focuses on helping countries to improve their financial infrastructure to facilitate access to credit. The Secured Transactions Register does this by creating the conditions to allow the use of movable assets/property (such as inventory, accounts receivable, vehicles, equipment, crops, livestock, etc.) as collateral to generate loans.