Traders commend RBZ for Collateral Registry Mr Michael Ndiweni

Nqobile Bhebhe, Senior Business Reporter
THE Reserve Bank of Zimbabwe has been commended for including a wide range of movable assets to be used as collateral including gold coins and livestock with traders saying accessing loans would be much easier.

The central bank established a Collateral Registry for movable assets in order to expand the range of qualifying collateral accepted by lenders as part of the broader reforms to promote access to finance and enhance financial inclusion.

It said the development is expected to benefit micro, small and medium enterprise (MSMEs) as well as the household sectors and ultimately boost production.

SMEs face difficulties in accessing funding as financial institutions demand collateral in the form of immovable property like houses.
The banking sector has been accused of imposing stringent conditions for businesses that need funding.

The Collateral Registry is established in terms of the Movable Property Security Interests Act [Chapter 14:35] which  allows the use of movable assets as collateral for loans.

The central bank indicated that qualifying movable collateral varies from one lending institution to another, however, the generally acceptable movable property includes agricultural products such as livestock, poultry, crops, industrial and commercial equipment, durable consumer goods and household items, agricultural equipment, inventory and raw materials, gold coins, shares, patents, copyrights and trademarks.

Bulawayo Vendors and Traders’ Association director, Mr Michael Ndiweni said this is a positive development for all workers in the informal economy.

“Over time, traders have been raising concerns over stringent requirements for one to access a loan.
“With this new development, it’s a step in the right direction.

“It is now the duty of the RBZ and Government through the Ministry of Information to ensure that this information reaches everyone who may want to access loans.
“It is a defining moment for traders and we want applicants to access loans within a reasonable period after applying,” said  Ndiweni.

Reserve Bank of Zimbabwe (RBZ)

He added that the central bank should embark on aggressive awareness campaigns educating the general public on the development.

“We are calling for outreach programmes to ensure people have access to such information and it should be decentralised to ensure that it is not known by people  in urban areas but also in rural communities.

“To us, the development is by and large positive and we applaud RBZ for this.”
According to the central bank, individuals may apply for a loan as a group, as may be specified by lending institutions.

Livestock

They may use their assets that they own individually or jointly as collateral for a loan.
With the facility, would be borrowers have increased access to credit, enable MSMEs to leverage their movable assets to obtain credit for growth and there is reduced cost of credit in the long run.

It added that the expanded collateral registry is a springboard to move from informal to formal financing.

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