Regulation needed in financial sector

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