Zimbabweans welcome the cows as collateral bill

 METHODOLOGY

The Portfolio Committee on Finance and Economic Development together with the Portfolio Committee on Small and Medium Enterprises and Cooperative Development resolved to analyse the Bill jointly since it largely affects the MSMEs which the latter Portfolio Committee superintends over. In order to solicit the views of the public on the Bill and consistent with Section 141 of the Constitution of Zimbabwe, the two Committees conducted joint public hearings on the Bill. The hearings were held from 20 to 24 March 2017 in Mutare, Marondera, Harare, Chinhoyi, Bindura, Masvingo, Gweru, Bulawayo, Gwanda and Victoria Falls – thus ensuring that each of the country’s 10 provinces are consulted.

 The two Committees would like to extend their sincere appreciation to all members of the public who participated during the hearings in their individual capacities and those that made written submissions as representatives of organizations. These include the Bankers Association of Zimbabwe, Zimbabwe Chamber of Small and Medium Enterprises, Microfinance Companies, Deposits Protection Corporation, lawyers and members of the public in general. Their valued contributions form part of this report with recommendations for consideration by the Hon. Minister of Finance and Economic Development.

 FINDINGS AND OBSERVATIONS

The Bill was welcomed by both prospective borrowers and financial institutions. For the borrowers, the Bill will unlock funding for their business activities as they would be able to borrow funds using an array of movable properties at their disposal. However, for the lenders, the Bill was received with some reservations as they sought clarification on some issues, as will be highlighted below.

Clause 2: Interpretation/Definitions

While a number of words and phrases have been defined in the Bill, it was observed that some of the definitions lack depth and require further explanations so that they are unambiguous. For example, “intangible assets” is defined as all types of movable assets other than tangible assets in the Bill. It was argued that this definition, if juxtaposed with the Kenyan Version, it includes receivables, deposit accounts, electronic securities and intellectual property rights. In Zambia, their Movable Property Security Interest Bill defines an intangible asset as including movable property, a financial contract, incorporeal rights, excluding goods, documents of title, securities, money and negotiable instruments. Thus, the comparison shows that the Zimbabwean Bill has to be more comprehensive to avoid misinterpretation and allow certainty of the law.

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