RBZ collateral registry to drive credit access

HARARE – The Reserve Bank of Zimbabwe (RBZ) has introduced a collateral registry to facilitate registration of movable property security interests in a development expected to drive commerce, industry and other economic activities through enhanced access to credit.

RBZ Governor Dr John Mangudya said at the launch event on Friday that access to credit, especially by a small enterprises and individuals, was mainly hampered by lack of collateral acceptable to financial institutions.

“It is this bottleneck that a collateral registry is designed to eliminate and give fresh impetus to the economy,” Dr Mangudya said. The collateral registry is provided for in terms of Section 4 of the Movable Property Security Interest Act.

Operationalisation of the Act was waiting for the establishment of the collateral registry, established by the RBZ, which is now complete. The effective date is November 4, 2022, as proclaimed by President Mnangagwa.

“The registry system connects lenders to borrowers. It gives comfort to lenders and makes it easy to pledge their movable assets as collateral security,” Dr Mangudya said.

The kind of movable property security interest that can be registered in the collateral registry includes any security interest or asset that may be evidenced or created by means of chattel mortgage (property other than real property and includes animals, leases, money and gold coins).

This also entails notarial bond, note of hand, charge, secured debenture, pledge, trust receipts, financial lease and any other transaction that secures payment or performance obligation.

“The purpose of the collateral registry is to facilitate commerce, industry and other socio-economic activities by enabling individuals and businesses to utilise their movable property and assets as collateral for credit,” he said.

The functions of the collateral registry are to receive and store registered notices with respect to security interests, to amend or cancel the registered notices of collaterals, to make accessible to the public information in registered notices and to maintain a database of relevant information on debtors and secured creditors.