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Insolvency & Creditor/Debtor Regime and Secured Transactions in Moldova

Project Development Objective ( PDO )

This project aims to improve and broaden access to finance and financial inclusion in Moldova through the modernization of the legal and institutional framework applying to corporate insolvency and secured transactions over movable collateral.

Background

The proposed project will serve the overall objective to improve and broaden access to credit and financial inclusion in Moldova, with a particular focus on SMEs under both components. In this context, the specific objectives of this project are to (i) support modernization of the legal and regulatory framework for corporate insolvency and secured transactions, and (ii) strengthen the institutional framework for implementing the 2012 Insolvency Law and the 2014 amendments to the Pledge Law by increasing the capacity and skill sets of relevant stakeholders. These measures will improve the domestic lending markets and lead to both an increase in the levels of credit made available to SMEs and a decrease in the NPL stock in Moldova, as suggested by recent economic research in this area.

Activities / Output

The expected activities include the following:

1. Corporate Insolvency:
(a) Legal Framework:
• Amendments to the Insolvency Law drafted
• Legal/regulatory Note reviewed
• Training event delivered
(b) Training Program:
• Trainings provided to judges, insolvency administrators, and gov. officials on the Insolvency Law
• Explanatory Guideline on the contents of legal amendments delivered

2. Secured Transactions:
• Review of regulatory framework and registry’s operations, needed changes proposed/recommended
• Technical support and recommendations on how to optimize the registry’s operations (e.g., search engine, migration of data, access to data by different operators, etc.)
• Training delivered to financial institutions, borrowers and officials at the collateral registry

Expected Outcomes

The expected activities include the following:

1. Corporate Insolvency:
(a) Legal Framework:
• Amendments to the Insolvency Law drafted
• Legal/regulatory Note reviewed
• Training event delivered
(b) Training Program:
• Trainings provided to judges, insolvency administrators, and gov. officials on the Insolvency Law
• Explanatory Guideline on the contents of legal amendments delivered

2. Secured Transactions:
• Review of regulatory framework and registry’s operations, needed changes proposed/recommended
• Technical support and recommendations on how to optimize the registry’s operations (e.g., search engine, migration of data, access to data by different operators, etc.)
• Training delivered to financial institutions, borrowers and officials at the collateral registry