| James Kon |
BRUNEI Darussalam’s reforms to ensure credit information is made more easily accessible, stronger legal rights are afforded for borrowers and lenders, and businesses gain smoother access to financial support have borne fruit, with the country performing well in the recent World Bank Doing Business 2019 report.
Under the report’s Getting Credit indicator, Brunei ranked first out of 190 economies, sharing top spot with New Zealand.
Highlighting the achievement was Managing Director of Autoriti Monetari Brunei Darussalam (AMBD) Yusof bin Haji Abdul Rahman in his welcoming remarks at the Brunei Darussalam Getting Credit (BDGC) Conference 2018 yesterday with the theme ‘Leveraging Reputational, Traditional and Alternative Collateral to Raise Capital’.
Elaborating on the progress Brunei has made in the area, Yusof said, “Brunei Darussalam has seen continuous improvements in its rankings for the World Bank’s Doing Business Index and a significant rise under the getting credit indicator. AMBD has pursued reforms through the establishment of the Collateral Registry, the enactment of the Secured Transaction Order (STO) in 2016, and the implementation of a national Credit Score performance indicator earlier this year.”
The managing director added that though Brunei has made improvements in this area of its economy, financial institutions and services operating in the country should continue striving to be competitive and innovative to capture the available growth opportunities.
“The possibility of using reputational, traditional and non-traditional collateral would enable financial institutions to expand their financial products and services. This would at the same time help individuals and micro, small and medium enterprises (MSMEs) gain access to finance and more favourable and competitive financing options,” he said.
To support and facilitate the growth of MSMEs in the country, Yusof pointed out that the Government of His Majesty Sultan Haji Hassanal Bolkiah Mu’izzaddin Waddaulah ibni Al-Marhum Sultan Haji Omar ‘Ali Saifuddien Sa’adul Khairi Waddien, Sultan and Yang Di-Pertuan of Brunei Darussalam has been providing facilities to MSMEs for them to start and expand their businesses in various types of economic sectors.
One of this is Bank Usahawan, an SME bank established in 2017 to help strengthen local MSMEs. The government sees the bank as crucial in developing MSMEs in Brunei to a point where they can contribute significantly to the economy and play a major part in the country’s economic diversification drive.
Punctuating the significance of MSMEs for the local economy, Yusof said, “MSMEs represent 96.5 per cent of the active enterprises in Brunei, according to the Department of Economic Planning and Development’s Preliminary Report of Economic Census of Enterprises (ECE) 2016. They also employ four out of every 10 people of the active working population.
“In terms of revenue contribution, the figure for MSMEs has risen both in value (from BND7.9 billion in 2010 to BND8.3 billion in 2015) and share of the economy (from 26.9 per cent in 2010 to 34.8 per cent in 2015).”
The managing director added that Brunei has seen an increase in corporate lending, according to data collected by AMBD in 2018.
“There is an increase in the corporate portfolio where the amount has risen from BND2.2 billion in September 2017 to BND2.5 billion in September 2018. This increase has largely come from the transportation and manufacturing sectors. Likewise, the number of corporate accounts approved has increased from 484 accounts in September 2017 to 511 accounts in September 2018,” he explained.