Thandeka Moyo, Chronicle Reporter
MPs have said the Movable Property Security Interests Bill will ensure that more Zimbabweans will have access to bank loans.
Presenting a report by the Finance and Economic Development and Small and Medium Enterprises and Cooperative Development committee in parliament on Tuesday, committee chairperson Cde David Chapfika said the proposed law that was gazetted in November last year, seeks to provide for the use of movable property as security for purposes of obtaining loans from financial institutions.
He said 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,” he said.
“Therefore, the Bill will enable borrowers and lenders to recognise 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.”
Cde Chapfika said during public hearings, 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.
He said some participants had however sought clarity on how the Bill will deal with women who would want to secure loans using property registered in their 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. It is recommended that a clause be included in the Bill to provide for assets registered in the spouse’s name to be used by either spouse subject to consent of either party,” said Cde Chapfika.
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