Collateral registry to be operational in H1

BUSINESS REPORTER

The Reserve Bank of Zimbabwe (RBZ) says a collateral registry will be operational in the first half of the year thereby allowing MSMEs to use movable property as security in accessing loans from banks in a major boost for financial inclusion.

Banks were reluctant to lend to the MSMEs sector in the absence of collateral.

RBZ deputy governor Jesimen Chipika said the collateral registry has been paid for and would be received anytime from now.

“We are nearly there. We have waited for it in the past 4 or 5 years. It has not been easy to locate the correct registry for our needs. We finally did it. We got one from Ghana,” Chipika said at the launch of the African Development Bank’s Youth Entrepreneurship and Innovation Multi-donor Trust Fund youth led MSME training and mentorship programme in Harare last week.

The central bank has been pushing for financial inclusion and put in place an MSME desk at the Export Credit Guarantee Corporation.

Statistics show that the youth account for more than 67% of the total population.

Chipika said young people have a great potential to contribute meaningfully to economic development and nation building given the vision, the right mentorship and guidance, the right skills, and adequate resources.

“Access to quality financial services on a sustainable basis is key to unlocking the full entrepreneurial potential in young people, which in turn is critical for meaningful economic development and economic emancipation of the majority of Zimbabweans,” she said.

The young people, Chipika said are generally considered “high risk” and continue to be financially excluded due to a number of reasons including the negative stereotypes, lack of credit history, lack of requisite collateral, and lack of adequate business experience and skills.

She said no meaningful and credible economic growth can take place without incorporating strategies and initiatives aimed at facilitating financial, social and economic inclusion of women who account for 52% of the population.

Chipika said challenges that have militated against financial inclusion of women include but are not limited to, historically lower levels of education and financial literacy, lower income levels, lack of tangible assets or collateral, legal constraints, time and mobility constraints, socio-cultural constraints, inter-role conflicts involving domestic and professional roles, and a lack of market exposure, this makes the situation even worse for female youths.