4. Impact of Reforms Globally and Latest Developments

Strictly Confidential © 2014 In China, legal reform (2007) and new centralized online registry for accounts receivables and leasing (2008) More than US$ 6 trillion in financing with receivables (mostly to SMEs 60%) Development of the factoring and leasing industries In Colombia new Secured lending Law in 2013 and new centralized collateral registry in March 2014 In 6 months more loans registered than in the last 30 years. More than 58,000 loans registered for a value of more than US$ 10 billion Results of Collateral Registry Projects in Other Regions In Mexico Law reform and new centralized online registry (October 2011) Over 150,000 loans have been registered for a total secured amount estimated at over USD$200 billion. Loans secured with movables have multiplied by 4 45% of the loans to the agricultural sector and 95% to SMEs. Businesses have saved US$4 billion in fees In Vietnam, legal reform and new centralized online registry (March 2012) 400,000 loans have been granted to more than 215,000 SMEs and 15,000 micro Total volume of financing through the registry is US$ 13.7 billion

More than 100 local SMEs have received more than US$ 10 million. Created hundreds of new jobs. SMEs use movable assets (contracts, receivables, equipment) as collateral No defaults in the 30 months that program has been operating COLLATERAL REGISTRIES - GHANA: IMPACT ON SMEs THORUGH SUPPLY CHAIN FINANCE CAL BANK: Purchase Financing Scheme for Gold Mining Developed a local supply chain for big mining corporations, through local SME service providers OVERALL – 60,000 loans registered for a value of US$14 billion. More than 8,000 SMEs and 30,000 Micro received loans. Collateral by type: Inventory & receivables (25%), Household goods (20%), vehicles (19%)

4 IMPACT ON CONFLICT AFFECTED COUNTRIES: AFGHANISTAN COLLATERAL REGISTRY 1US$ = 50 AF Billion AF = $575 million AFGHANISTAN COLLATERAL REGISTRY STATISTICS (As of May 2015) Indicators Commercial Bank UsersAll Government Account (FSD/DAB)15 Micro Finance Institutions (MFIs)1 Total Number of Registered Notices3869 Total Number of Search9318 Total Value of Registered Credit44.3 Billion AF Chargor Size (Less than 15 Employees) 2116 Chargor Size (Less than 30 Employees) 299 Chargor Size (Less than 50 Employees) 88 Chargor Size (Less than 100 Employees) 40 Chargor Size (More than 100 Employees) 42 Ownership Composition (Male)2552 Ownership Composition (Female)10 Ownership Composition (Male & Female)23

5 COLLATERAL REGISTRY IN LIBERIA Legal framework: Chapter 5 of Commercial Code (2010) Central Bank Registry Regulations (2013) Launch of collateral registry: June 18, 2014 Special characteristics: None Number of registrations: 95 Number of SMEs: 24 Number of Micro: 0 Number of women-borrowers: 18 Total value of financing facilitated: $230,897,230 Value of financing to SMEs: $123,910,382 Value of financing to women: $160,039

6 UZBEKISTAN COLLATERAL REGISTRY Law on Collateral Registry adopted in 2013 Registry launched in 2014 Currently more than 270,000 registrations New package of legislative amendments to be adopted

7 MALAWI PERSONAL PROPERTY SECURITY REGISTRY Personal Property and Security Act adopted in 2013; Registry launched in December 2015; Operated by the Department of Registrar General (DRG).

8 These Countries Also Started Developing Modern Registries: Decree on Collateral Registry was signed by the President of Belarus in December 2015 and the Registry will become operational by September 2016 The modern Law on Secured Transactions was enacted in Egypt (a first country in MENA to do so) Similar to Palestine, Jordan will launch the new registry for lessors’ interests under Leasing Law which can be expended once the Secured Transactions law is enacted by the Parliament

9 DOING BUSINESS The 12 areas of business regulation measured by doing business affect firms throughout their life cycle At start-up Starting a business Labor market regulation In daily operations Paying taxes Trading across borders In getting financing Getting credit Protecting minority investors In getting a location Dealing with construction permits Getting electricity Registering property When things go wrong Enforcing contracts Resolving insolvency

Time and motion VS legal indicators 10 Measure procedural efficiency of the regulatory process Follow the entrepreneur from the beginning to the end of a basic transaction Record every step of the process, and the associated time and cost Gather all the relevant laws, regulations, decrees and fee schedules  Civil Law  Commercial Law  Tax Law  Secured Transactions Law  Civil Procedure Law  Insolvency Law  Labor Code The Doing Business Law Library is the largest free online collection of business laws and regulations with more than 5,000 business regulatory references

11 Twelve month project cycle Data analysis and government feedback: -Coding of 58,000 data points Publication/writing Report production Media outreach: 10,500 articles and mentions since launch Counterparts for data Questionnai res - generation - 17,500 sent Translations Website: 1 million visits in 2 weeks Data verification: - Correspondence - Travel to more than 25 countries Dec- Jan Feb- May June- Aug Sept- Nov Launch: Virtual and roadshows June 1st cutoff date for reform

Top 50 performers on the ease of doing business in 2014/ Source: Doing Business RankEconomyDTF score 1Singapore New Zealand Denmark Korea, Rep Hong Kong SAR, China United Kingdom United States Sweden Norway Finland Taiwan, China Macedonia, FYR Australia Canada Germany Estonia Ireland Malaysia Iceland Lithuania Austria Latvia Portugal Georgia Poland76.45 RankEconomyDTF score 26Switzerland France Netherlands Slovak Republic Slovenia United Arab Emirates Mauritius Spain Japan Armenia Czech Republic Romania Bulgaria Mexico Croatia Kazakhstan Hungary Belgium Belarus Italy Montenegro Cyprus Chile Thailand Peru71.33

Methodology: Getting Credit 13 Getting Credit – Legal Rights index: 12 points Getting Credit – Credit Information index: 8 points

12 components: 10 aspects related to legal rights in collateral law and 2 aspects in bankruptcy law Getting Credit – Legal Rights 14 Strength of legal rights index (0-12) Scor e Does an integrated or unified legal framework for secured transactions that extends to the creation, publicity and enforcement of functional equivalents to security interests in movable assets exist in the economy? Yes Does the law allow businesses to grant a non possessory security right in a single category of movable assets, without requiring a specific description of collateral? Yes Does the law allow businesses to grant a non possessory security right in substantially all of its assets, without requiring a specific description of collateral? Yes May a security right extend to future or after-acquired assets, and may it extend automatically to the products, proceeds or replacements of the original assets? Yes Is a general description of debts and obligations permitted in collateral agreements; can all types of debts and obligations be secured between parties; and can the collateral agreement include a maximum amount for which the assets are encumbered? Yes Is a collateral registry in operation for both incorporated and non-incorporated entities, that is unified geographically and by asset type, with an electronic database indexed by debtor's name? Yes Does a notice-based collateral registry exist in which all functional equivalents can be registered? Yes Does a modern collateral registry exist in which registrations, amendments, cancellations and searches can be performed online by any interested third party? Yes Are secured creditors paid first (i.e. before tax claims and employee claims) when a debtor defaults outside an insolvency procedure? Yes Are secured creditors paid first (i.e. before tax claims and employee claims) when a business is liquidated? Yes Are secured creditors subject to an automatic stay on enforcement when a debtor enters a court- supervised reorganization procedure? Does the law protect secured creditors’ rights by providing clear grounds for relief from the stay and/or sets a time limit for it? Yes Does the law allow parties to agree on out of court enforcement at the time a security interest is created? Does the law allow the secured creditor to sell the collateral through public auction and private tender, as well as, for the secured creditor to keep the asset in satisfaction of the debt? Yes Score (number of "yes" responses) 12

Overview: Secured Transactions system & Credit cycle of NPSI Getting Credit – Legal Rights 15 Functional approach Single law or same principles apply for all security interests and their functional equivalents Registration in one collateral registry Creation Types of movable property that can be used as collateral Types of obligations that can be secured with collateral Description requirements of the collateral Publicity Recommended approach: registration 3 questions which reflect the features of a modern collateral registry Enforcement Priority rules outside/inside bankruptcy Secured creditors protection during reorganization or bankruptcy procedures Out of court enforcement

16 Economy Afghanistan Australia Bosnia and Herzegovina Cambodia Colombia Costa Rica El Salvador Honduras Hungary Jamaica Lao PDR Economy Liberia Marshall Islands Mexico Micronesia, Fed. Sts. Montenegro New Zealand Palau Solomon Islands Tonga Uzbekistan Vanuatu 22 economies obtained all three points in the questions relevant to collateral registries. Features measured In operation for both incorporated and non-incorporated entities; Unified geographically and by asset type; Electronic database indexed by debtor's name; Notice-based; All functional equivalents can be registered; Online meaning that registrations, amendments, cancellations and searches can be performed by any interested third party. Economies with modern collateral registries in 2014/2015 Getting Credit – Legal Rights

Reforms to strengthen rights of borrowers and lenders in 2014/2015 Getting Credit – Legal Rights 17 Strengthening legal rights of borrowers and lenders Created a unified and/or modern collateral registry for movable property Costa Rica; El Salvador; Hong Kong SAR, China; Indonesia; Liberia; Russian Federation; Uzbekistan El Salvador established a registry for security interests in movable property as part of its registry of commerce. The registry commenced operation in December Introduced a functional secured transactions system Costa Rica; El Salvador Costa Rica approved a new law establishing a modern legal framework for secured transactions. The law allows all types of movable assets, present or future, to be used as collateral to secure a loan. It also regulates functional equivalents to loans secured with movable property. Allowed for general description of assets that can be used as collateral Costa Rica; El Salvador; Kazakhstan; Mexico; Russian Federation; Uzbekistan Mexico implemented new laws which allow for the general description of assets granted as collateral. Expanded range of movable assets that can be used as collateral Costa Rica, El Salvador; Kazakhstan; Madagascar; Mexico; Russian Federation; Uzbekistan Madagascar introduced a new law that broadens the scope of assets which can be used as collateral to secure a loan.

Top improvers on the strength of legal rights index in 2014/15 Getting Credit – Legal Rights 18

Top performers in 2014/15 Getting Credit – Legal Rights 1.Colombia Establishing a functional approach to secured transactions Allowing a general description of collateral Maintaining a unified registry Protecting secured creditors’ rights during an automatic stay when a debtor enters a court-supervised reorganization procedure Allowing out-of-court- enforcement 2.Montenegro 3.New Zealand 4.Australia 5.Cambodia 6.Micronesia, Fed. Sts. 7.Rwanda 8.United States 9.Costa Rica 10. Hungary 19 Good common practices

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