President assents to moveable collateral Act

PRESIDENT Mugabe has assented to the Moveable Property Security Interests Act that is expected to relax collateral requirements for borrowers, especially cross border traders who have been failing to access funds from financial institutions.

Speaking at a meeting between thousands of cross border traders and the Reserve Bank of Zimbabwe on Friday last week, Cross Border Traders Assocation president Dr Killer Zivhu said the move was expected to enhance business.

The meeting was convened by Dr Zivhu to enable the central bank to give Cross Border Traders Assocation members feedback on the recently availed $15 million facility.

The $15 million facility is specifically meant for cross border traders to operate efficienctly and was negotiated by Dr Zivhu.

Under the Moveable Property Security Interests Act, borrowers can now access loans using moveable property such as vehicles, furniture and livestock.

Dr Zivhu said members of his association were relieved by such a measure.

“This is one of the most welcome measures by Government that will help the operations of this group which has millions of members,” he said. “We are happy with this initiative as it will ensure financial inclusion for our members.”

Dr Zivhu said the assocation had roped in a firm called Global Entreprenurship Socirty (GES) that will also provide collateral to members.

“We have heard cross border traders lamenting lack of collateral, but now that GES has come on board we hope we will witness the rise in uptake of this $15 million faiclity,” he said.

Dr Zivhu said the Cross Border Traders Assocation would soon disptach its members to various countries to explore opportunities for markets for local products.

He said the move was meant to enhance exports and earn the much needed foreign currency for the country.

Agribank and Homelink, a Reserve Bank subsidiary, are the two financial institutions facilitating access to the $15 million facility for the cross border traders.

Traders can exchange bond notes at a rate of 1:1 with the United States dollar or get other currencies, as well as get loans for their businesses.

The interest rate for the loans is pegged at one percent per annum.

Reserve Bank of Zimbabwe Deputy Governer Dr Jesimen Chipika told cross border traders at the meeting that they expected an increase in the uptake of the $15 million facility.

“The Moveable Property Security Interests Act is part of our plans to widen financial inclusion to ensure that noone is left out when it comes to benefiting in terms of doing business,” said Dr Chipika.

“We are establishing a collateral registry at the central bank to ensure that people do not use the same items for collateral at different institutions.

“If one applies for a loan and pledges the moveable property, the respective financial institution will have to bring the person to the Reserve Bank and check if the items have not been committed elsewhere.”

The Act was passed by Parliament recently.