Zimbabweans welcome the cows as collateral bill


Zimbabweans have welcomed the new bill that allows them to use movable property like cattle and cars as collateral saying this is a progressive legislation that will unlock the much needed financial resources and will boost economic activities especially in the small and medium enterprises sector.

According to Parliament’s Finance and Economic Development Committee and the Small and Medium Enterprises and Cooperative Development Committee, the bill was welcome but shouldinclude a clause that provides for assets registered in the spouse’s name to be used by the other spouse subject to consent of either party.

Insurance policies should also be mandatory for all movable assets to be used as collateral.

Below is the full report of the committees:

HON. CHAPFIKA:  Thank you very much Madam Speaker.  I rise to present the Portfolio Committee joint report of the Finance and Economic Development and Small and Medium Enterprises and Cooperative Development on the Movable Property Security Interests Bill (H.B. 7, 2016).


The Movable Property Security Interests Bill which was gazette  on 28 November 2016, seeks to provide for use of movable property as  security for purposes of obtaining loans from financial institutions. The Bill comes against the background in which government is stepping up its efforts to improve the ‘Ease of Doing Business’ in the country. The majority of Zimbabweans are facing challenges in securing bank loans, particularly capital to invest in their businesses, given that financial institutions require collateral security in the form of title deeds which most citizens do not have. Zimbabwean banks, which are the traditional sources of funding, are reluctant to provide loans to Small and Medium Enterprises (SMEs) and individuals who do not have immovable properties as collateral due to the high perceived risk associated with lending to SMEs and individuals. Therefore, the Bill will enable borrowers and lenders to recognize movable assets as collateral, thereby supporting credit financing secured with such assets. The Bill was well received by mostly Micro, Small and Medium Enterprises (MSMEs) and individuals in general, as it will create an opportunity to secure credit much easier than before.

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Charles Rukuni
The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.


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