PPSR — a business success story
The Personal Property Securities Register (PPSR) has helped New Zealand achieve its top ranking in the 2017 World Bank’s ease-of-doing business report.
The graph shows that the ratio of searches to security registrations is 5:1. The International Finance Corporation, part of the World Bank, believes the figures demonstrate that the register is being used by businesses as an important decision-making tool.
The ease-of-doing business report ranks New Zealand as the number 1 country for getting credit. This is a reflection of how effective our secured transactions regime is and the successful role the PPSR plays in that.
What makes the PPSR a success
The PPSR, which has been operating for more than 15 years, is a good example of a successful secured transactions regime because it:
- gives businesses and individuals the ability to manage the financial risks associated with lending, leasing and other types of credit-providing activities by offering a facility where they can register their interest over personal property that’s in the possession of others
- lets businesses and individuals use a wide range of personal property to gain access to credit
- helps creditors feel confident about the customers they’re providing credit to by being able to search for information about their secured interests
- provides protection to consumers who can search the PPSR to find out if high-value second-hand goods, such as cars, still have finance owing on them.
Usage of the PPSR has improved
Every year businesses and individuals register over 500,000 personal property security interests on the PPSR, and the register is searched more than 3 million times.
A register is effective when it’s kept up to date by its users. Any decline in amendments and discharges compared to new registrations and expiries suggests that over time there's a risk that the register will become cluttered with abandoned or redundant registrations. Since 2007, we’ve seen secured parties actively discharging the security interests rather than letting them expire. In 2016, discharges were more than double of the number of expiries.
For some years motor vehicles dominated the list, but in recent times a wider range of goods is being registered. This might indicate that businesses and individuals are more aware of the benefits of securing goods when wholesaling, selling on terms, hiring, renting or leasing out equipment.
Improvements to the PPSR coming soon
The PPSR has served New Zealand well since 2002 but as with all things the time has come for us to replace it. The website is available 24/7 and many people search the register using our Application Programming Interface (API), usually through a third-party provider. In fact, more than 76 per cent of all PPSR transactions come through our API.
The new PPSR register is currently being built in close liaison with businesses and software providers who connect to it and the launch date is set for 2 July 2018.