Zimbabwe’s collateral registry sees significant growth in registrations

Nqobile Bhebhe

THE Reserve Bank of Zimbabwe (RBZ) collateral registry had recorded 2 481 active registrations as at 31 December 2024 with a total principal value of ZiG42.19 billion with microfinance institutions as major users with 1 185 registrations, a recent mid-term monetary policy shows.

A collateral registry is a publicly available database of interests in or ownership of movable assets, allowing borrowers to prove their creditworthiness and potential lenders to access their ranking priority in potential claims against particular collateral.

Movable collateral that can be used as security includes equipment, inventory, accounts receivable, farm products, household items, and bank accounts.

“As at 31 December 2024, there were 2 481 active registrations in the Collateral Registry with a total principal value of ZiG42.19 billion.

“Microfinance institutions were the major users of the Collateral Registry with 1,185 registrations, followed by banks with 1,135 entries.

“In terms of value of movable collateral, banking institutions recorded a total of ZiG20.99 billion, while law firms registered a total value of ZiG20.75 billion on behalf of clients,” reads part of the mid-term monetary statement.

The Collateral Registry recorded a cumulative 4 516 security interest notices in movable assets since commencement in November 2022, comprising 2 481 (55 percent) active security interest notices, and 2 035 (45 percent) expired registrations.

The report also indicate that lending institutions continue to expand the types of movable assets which qualify as collateral.

In the period under review, collateral included household goods, private vehicles, trucks, agricultural equipment and shares.

Cognisant of the need to improve access to credit by the greater part of the population, the bank launched an online collateral registry in terms of movable property security interest (Chapter 14:35).

The registered institutions include banks, microfinance institutions, and law firms

According to the Government, the collateral registry system is a key system aimed at facilitating the National Financial Inclusion Strategy.