Zimbabweans welcome the cows as collateral bill

Mandatory Insurance

The Bill should also clarify how movable assets, which are prone to fire, theft, death and other hazards should be treated.  There might be need to consider mandatory insurance policy on all movable assets that are offered as security in order to protect both parties from possible losses that may occur.

Valuation of Movable Assets

Members of the public and business organisations raised concerns over the valuation process of the movable assets, given that movable assets depreciate in value. Thus, the valuation process must be able to protect both parties involved in the loan transaction. It was proposed that the regulations classify assets based on their ability to sell on the market, given that second hand goods are being used as collateral.

Property Registered in the Husband’s Name

Some participants sought clarity on how the Bill will deal with women who would want to secure loans using property registered in the husband’s or spouse’s  name whichever case may be – either husband or wife. This was raised in light of our African cultural practice where the family’s assets are registered in the husband’s name as head of the family.

COMMITTEES’ RECOMMENDATIONS

The Committees recommends the following in Parliament’s quest to  improve the Bill:

That Insurance policies should be mandatory for all movable assets to be used as Collateral.

That appointment of Registrar of the Collateral Registry should be done in consultation with the Minister of Finance and Economic Development to enhance transparency.

That a clause be included in the Bill to provide for assets registered in the spouse’s name to be used by the either spouse subject to consent of either party.

That the term ‘intangible asset’ be clearly defined.

That the Bill provides a mechanism for determining the depreciation of movable assets.

That the Bill be specific on the time frames within which the Registrar must issue reasons for rejecting a search request and the issuance of a search certificate.

That the Minister of Finance and Economic Development should promulgate regulations as soon as the Bill becomes law in order to  operationalise it.

CONCLUSION

The Bill was widely accepted by the members of the public and business organisations as very progressive since it has the potential to unlock the much needed financial resources and will boost economic activities particularly in the SMEs sector. The Bill is, therefore, recommended for adoption, subject to the proposed amendments for the Hon. Minister’s consideration.

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