No set date for collateral registry
RYAN CHIGOCHE
Finance and Economic Development Minister, Mthuli Ncube, has said no fixed date has been set to operationalise the collateral registry, which is expected to improve the plight of Small to Medium Enterprises (SMEs) through financial inclusion.
SMEs have been battling to access credit from local banks. Lenders demand title deeds for SMEs to access credit facilities.
But, a collateral registry, which is a record of legal claims to personal property used as collateral for a loan, removes the requirement of title deeds as the only basis upon which one can be given a loan.
Last year, the Reserve Bank of Zimbabwe announced that the apex bank was working with BSystems Limited of Ghana to operationalise the collateral registry system by year-end of 2021.
But, that did not happen.
Asked to give the new timelines, Ncube said: “You know we never give timelines of these things. But of course it needs to be operationalised. It’s one thing to have a registry and another for banks to recognise it and operationalise. Let’s keep pushing and make progress,” Ncube said.
The issue of access to funding for SMEs has been dragging on for a very long time as the banking systems are yet to come up with packages or requirements that better suit the SMEs sector.
SMEs have been pushing for the introduction of the collateral registry but without success.
Small to Medium Enterprises Association of Zimbabwe president Farai Mutambanengwe told Business Times they have been waiting for it for a very long time but nothing tangible has materialised.
“The Reserve Bank of Zimbabwe has been working on the registry but we are told it’s almost there but it has been almost there for a very long time so we are hoping that that comes off quickly,” he said.
Transparent collateral registries allow lenders to check if collateral being offered as security for a loan has already been pledged to another lender.
Movable collateral that can be used as security includes equipment, inventory, accounts receivable, farm products, household items and bank accounts.
