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LOAN COLLATERAL BROADENED – BAZ

THE moveable property registry has broadened the scope of collateral acceptable by commercial banks to lend out loans, thereby widening access to financial services, Bankers Association of Zambia (BAZ) has said.

Moveable property (security interest) intends to enhance access to credit particularly by small scale businesses by providing safeguards required by lenders to accept movable property as collateral.

BAZ Chief Executive Officer, Leonard Mwanza, said the registry had widened the scope of security lenders, thereby expanding financial inclusion. Mr Mwanza said the registry provided an extra layer of comfort to commercial banks that their money was safe as they were lending it out.

“Whilst previously there was a general outcry that financial institution lenders were only accepting landed properties, now the options for securities that banks can accept is far much wider with those assets that can be registered under the movable act,” he said in an interview.

The registry which provides for the establishment of a “collateral registry” is housed at the Patents and Companies Registration Agency.

Mr Mwanza said the registry had also provided an opportunity for people who may not have landed property under their portfolio to utilise their movable assets to access financial services.

He said one of the measures attached to the registry was access to finance and the range of acceptable security during the lending process. “Banks continue to registry their interest on the categories of assists highlighted in the movable assets collateral registry so what happens is depending on the collateral that a client is offering. “If it falls in the category of a moveable asset such as a vehicle, cash deposits and others, banks have to register their interest in that asset,” Mr Mwanza said.

The listing, he explained, was dependent on the number of successful loans that were offered to customers which required that banks placed a security interest on a particular asset that fell under the movable registry.

Mr Mwanza said the listing was a continuous process which was informed by a number of facilities approved and which required security.

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