Autoriti Monetari Brunei Darussalam (AMBD) held two separate sessions of the Secured Transactions Workshop: Banking on Your Business Assets, on Monday, where renowned international experts in the field of asset-based lending and commercial lending were brought in to share success stories and lessons learnt and to share the most relevant financing alternatives enabled by the Secured Transactions Order, 2016.
The half-day workshops that took place at the Design and Technology Building in Berakas and Pusat Insani, Seria, were tailored specifically for the local business community, particularly the small and medium-sized enterprises (SMEs).
The workshop also discussed the financing needs of SMEs involved in different sectors of the economy so that financial institutions and other industry players can collaboratively develop modern financing products that will be beneficial to all.
Over 115 participants, representing different business industries across the economy ranging from food and beverage, construction, oil and gas sectors, attended the sessions
At the workshop, the participants learnt about financing alternatives that they could utilise to optimise their trade activities and also improve their business cash flow.
One of the financing instruments is called Factoring, which allows a business to sell its invoices, or receivables, at a discounted rate, to a third-party financial company known as a “factor”. The factor then collects payment on those invoices from the business’ customers. The main reason for a business to choose factoring is that they want to receive cash quickly on their receivables, rather than waiting for the typical 30 to 60 days to receive payment from their customer.
Another financial instrument introduced at the workshop is Supply Chain Finance, which is a set of technology-based businesses and financing processes that link buyers, sellers, and financing institutions in a transaction, to lower financing costs and improve business efficiency. Supply chain finance provides short-term credit that optimises working capital for both the buyer and the seller.
The workshop is part of a series of capacity building for various stakeholders, held by AMBD as the champion group of Ease of Doing Business – the Getting Credit Indicator. In line with this, AMBD has made several initiatives over the recent years to facilitate easier access to credit by strengthening the legal and the institutional framework towards a more conducive business environment in Brunei Darussalam. One of the initiatives was the modernisation of the secured transactions regime, where in 2016, the Secured Transactions Order and the accompanying regulations were set into force and the Collateral Registry was established under AMBD.
Brunei Darussalam is now ranked number one, joint with New Zealand, for the Ease of Doing Business – the Getting Credit Indicator.