Business Reporter
The Reserve Bank of Zimbabwe (RBZ) collateral registry had recorded 377 active registered security interests pledged against $620,02 billion in loans as of July 24, 2023, marking a critical milestone in efforts to improve access to credit for micro, small and medium enterprises (SMEs), the central bank has said.
Cognisant of the need to improve access to credit by the greater part of the population, the bank launched an online collateral registry in terms of movable property security interest (Chapter 14:35).
As of June 30, 2023, 46 institutional users had been registered in the system since the commencement date was gazetted on November 4, 2022.
The registered institutions include banks, microfinance institutions, and law firms.
“The operationalisation of the collateral registry marks a critical milestone in access to credit and will facilitate borrowing opportunities for micro, small, and medium enterprises,” the central bank said recently.
As part of its communication strategy to promote awareness and ensure effective operationalisation of the collateral registry, the bank conducted training and awareness workshops in Harare, Bulawayo, Gweru, Masvingo, Mutare, and Beitbridge between April and July 2023, targeting banking institutions, microfinance institutions, MSMEs, and law firms.
“The bank will continue to drive the communication strategy to ensure awareness and full adoption of the registry across the country,” the RBZ said.
According to the Government, the collateral registry system is a key system aimed at facilitating the National Financial Inclusion Strategy.
A collateral registry is a publicly available database of interests in or ownership of movable assets, allowing borrowers to prove their creditworthiness and potential lenders to access their ranking priority in potential claims against particular collateral.
Movable collateral that can be used as security includes equipment, inventory, accounts receivable, farm products, household items, and bank accounts.
The RBZ said the credit databases at the Credit Registry and the three private bureaus continue to offer reference points for lenders to check the creditworthiness of clients during origination and through the cycle of the loans.
The bank said four credit reporting institutions in the country held 22,96 million searchable records as of June 30, 2023.
“In the credit registry, the open and closed loan records were at 28,61 percent and 71,39 percent of the total loan records of 2,26 million as of June 30, 2023, respectively,” said RBZ.
The central bank said the gender distribution of loans is generally skewed towards male borrowers, who constituted 68.01 percent of loan contracts in the Credit Registry.
“Over the year, there were more women accessing financial services for the first time compared to men,” the RBZ said.