Cows, goats, TV sets and fridges could soon be acceptable collateral in Zimbabwean banks if a bill tabled by the Finance Ministry is passed into law.
The legislation proposes to set up a collateral security register, which would be used by borrowers to apply for loans. The move would see financial inclusion for a large part of the population which so far has been excluded from accessing loans from banking institutions.
Farai Mwakutuya is in Harare with the story.
Under legislation introduced in parliament this week, borrowers would be allowed to register “moveable” assets as collateral at a central bank registrar. The bill would require commercial banks to accept them as security for credit.
According to the country’s Finance Minister, Patrick Chinamasa, the assets would “include any type such as machinery, motor vehicles, livestock, and accounts receivable”.
He added that the reform would “promote financial inclusion to small and medium enterprises, women, youths and other under-banked groups”, and “increase access to credit”.