RBZ finalises collateral registry
RYAN CHIGOCHE
The Reserve Bank of Zimbabwe (RBZ) is finalising the setting up of the collateral registry system as it seeks to allow borrowers with movable properties to use them as collateral when seeking loans from financial institutions.
The assets have to be registered with the central bank to prove their credit worthiness with potential lenders. Plans to set up a collateral registry have been on the cards for the past five years.
RBZ governor, John Mangudya, said the bank is targeting to conduct the final pilot testing of the Collateral Registry System with stakeholders during the month of August 2022.
“The system is expected to centralise the database of movable assets accepted by banks and Microfinance institutions as collateral for secured loans. The new system will facilitate access to credit and encourage economic activity and contribute towards stimulating growth to the various economic sectors,’’ Mangudya said.
The SMEs have been finding it difficult to access loans from the banks and microfinance institutions and have been pushing for the introduction of the collateral registry.
Last year the bank said it was collaborating with BSystems Limited of Ghana to bring the collateral registration system online.
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.
