IFC supports insolvency reform in Mongolia
IFC, a member of the World Bank Group, signed a Memorandum of Understanding with MOJHA to help reform the country’s bankruptcy framework.
IFC, a member of the World Bank Group, signed a Memorandum of Understanding with the Ministry of Justice and Home Affairs (MOJHA) of Mongolia to help reform the country’s bankruptcy framework. It further aims to improve access to finance and ensure financial stability in the country by strengthening the insolvency and debt collections system. The reform is intended to enable the Mongolian credit industry to manage debtor insolvencies and collections in more effective, efficient and responsible ways. It will strengthen a critical piece of financial infrastructure, particularly for the financing of micro, small and medium enterprises. It will also complement other areas of reforms that are being undertaken by the government to drive economic growth. Going ahead, the project will focus on strengthening the legal and regulatory framework by updating the current bankruptcy law. In addition, it will develop capacities and standards for Mongolian insolvency professionals and promote non-judicial means of insolvency resolutions and improving debt collection standards. Effective insolvency system helps to reduce uncertainty and potential risks faced by lenders and investors with predictable debt collection and recovery process. It also supports entrepreneurship by giving the insolvent business individuals reasonable exits and a fresh re-start.
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