Reg­u­la­tion needed in fi­nan­cial sec­tor

Chronicle (Zimbabwe) - - National News -

EDITOR — Much as it might make sense to have mov­able prop­erty recog­nised as col­lat­eral when one bor­rows from banks or mi­cro-fi­nance in­sti­tu­tions it is im­por­tant to reg­u­late the en­vi­ron­ment to pro­tect the bor­rower from un­scrupu­lous banks and mi­cro­fi­nance lenders who are si­phon­ing this econ­omy with reck­less aban­don.

Grow­ing an econ­omy re­quires among other things credit which must be af­ford­able. The mere fact that banks are an is­land of pros­per­ity in a sea of poverty is enough to raise eye­brows. We are not say­ing peo­ple must not pay debts but those that lend must not siphon from the econ­omy to the ex­tent of hav­ing in­di­vid­u­als dy­ing of stress and the econ­omy bleed­ing.

The in­ter­est rates be­ing charged are just way too high for sus­tain­able bor­row­ing. In fact, the more we de­lay to act on this as a coun­try the greater the pos­si­bil­ity of busi­ness fail­ures as a re­sult of fail­ure to ser­vice the debts.

All debts that were in­curred by in­di­vid­u­als and busi­nesses since 2009 are not gen­uinely and eq­ui­tably established and are skewed in favour of the lenders. There­fore, most prop­erty auc­tions since then have been done to re­cover more than just a pound of flesh.

Peo­ple and com­pa­nies have been bled to col­lapse as a re­sult and au­thor­i­ties have to act. This ruth­less cap­i­tal has been un­justly en­riched and this con­tin­ues to hap­pen un­der the watch of the RBZ.

We can­not op­er­ate in an en­vi­ron­ment where bor­row­ing is es­sen­tially a life sen­tence. Busi­nesses can only grow if they have ac­cess to cap­i­tal at rea­son­able rates. We need to pro­tect our en­trepreneurs in the small to medium in­dus­tries be­cause they are the ones who will be the em­ploy­ers of the fu­ture.

High in­ter­est rates are a de­ter­rent and part of the prob­lem our econ­omy is fac­ing. We need bet­ter reg­u­la­tion. An­thony Moyo

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