Banks refine product needs

COMMERCIAL banks are currently refining their product offering to meet the needs of the market and utilising the movable property collateral registry, says the Bankers Association of Zambia (BAZ) chief executive officer, Leonard Mwanza.

The moveable property (security interest) establishes a new electronic Collateral Registry for the registration of 'financing statements' relating to security taken over tangible or intangible movable property.

Mr Mwanza said in an interview that commercial banks were developing products that would support the moveable property asset registry to support Small and Medium Enterprises (SMEs).

He explained that most banks had educated staff and working on developing new products that would ensure clients borrowed money using movable assets.

“The movable property asset registry is up and running, it is running well in terms of system availability so the banks are able to search and lodge any assets that are pledged as collateral, we are talking about movable assets like motor vehicles also goods and things like that,” he said.

Mr Mwanza said this was meant to boost participation from commercial banks in the initiative which was currently low.

He explained that the low participation was due to different business strategies between commercial banks and micro finance institutions.

Mr Mwanza said there were more clients who had borrowed from micro institutions using household goods.

“The micro finance institutions are in that business of lending money to SMEs, individuals who are able to give assists such as household goods and pledge it as collateral.

“I do not think you would see banks asking to pledge your household furniture as collateral. So the reason why you do not see a lot of such from the commercial banks is because they would not necessarily be dealing with such kind of customers but the registry is up and running,” he said.

Mr Mwanza however said banks were in a business of lending money to any eligible client.

“Banks are in a business of giving money and they give money every day to those who ask for it. If they assess that you are able to borrow, they will always give you the money,” he said.