Madam President, the collateral registry system is aimed at achieving the following:
providing a mechanism for efficient registration of security interests in movable property and realisation of such interest in the event of a default of payment by borrowers;
· it seeks to provide the creation and perfection of movable security interests;
· providing a platform to inform parties and the public about the existence of a security interest in movable property and
· the collateral registry will be established as a department of the Reserve Bank headed by a Registrar appointed by the Governor of the Central Bank.
Madam President, with respect to enabling legislative framework, currently, the legal frame dealing with secured transactions is fragmented and needs to be consolidated and modernised in line with international best practices. The current laws governing this subject are in five pieces of legislation namely:
· The Deeds Registries Act,
· The Hire Registries Act,
· The Bills of Exchange Act,
· The Grain Marketing Act, and
· The Agricultural Finance Act, among others.
This system is inefficient, costly and lacks the transparency required to support the growth of secured lending transactions.
This Bill will provide for a holistic approach towards the utilisation of movable assets as collateral by harmonising the entire relevant Acts. In this regard, even the Reserve Bank of Zimbabwe Act and the Banking Act will be amended for the financial sector to achieve the intended objective of this Bill.
Creation of security interest by execution of security agreement
Madam President, the Collateral Registry will register the security interest provided the debtor has the rights in the movable asset. Such assets may include any type of movable assets such as machinery, automobiles, inventory, livestock and account receivables.
Collateral Registry Fees
The operations of the Collateral Registry would be funded through levying of cost recovery fees and charges to be specified in the regulations. The fees may be charged for registration, amendment and cancellation of notices.
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