ZiG47bn loans pledged against movable property

The Reserve Bank of Zimbabwe (RBZ) says the value of loans extended to individuals and secured against security registered in the central bank’s collateral registry reached ZiG47 billion as of February 2025.

The milestone highlights the effectiveness of the collateral registry in promoting financial inclusion and providing individuals and businesses with improved access to credit.

The registry is a publicly available database of interests in or ownership of movable assets tendered to secure loans.

According to the RBZ, there has been a notable improvement in access to and the usage of financial services among marginalised segments of the population as reflected by the total collateral pledged as of February 28, 2025.

The RBZ noted that the total collateral pledged was diverse, encompassing various asset classes that include intellectual property, accounts receivable and stocks of raw materials, among others.

According to the breakdown of the collateral pledged lists 11 intellectual properties, 13 accounts receivable, 18 stocks of raw material and 33 stocks of finished goods.

Other notable assets pledged as security for loans include manufacturing equipment (96), construction equipment (202), industrial equipment (209), livestock (240), buses (411), agriculture equipment (853), trucks (1 246), notarial general covering bonds (1 391), saloon cars (1 923), and household goods (3 199).

The diversity of the collateral pledged indicates a significant shift towards inclusive financing, enabling marginalised groups to access financial services using a wide range of assets.

Sectoral agriculture dominated the loan collateral registered.

As of February 28, 2025, the total collateral pledged towards agriculture comprised notarial general covering bonds with 470 pledges, followed by agriculture equipment with 242, trucks at 88, and 86 household goods.

Livestock, saloon cars, and other assets such as stocks of finished goods, industrial equipment, and accession/agreements also feature prominently. Micro, Small, and Medium Enterprises (MSMEs) pledged 340 collaterals.

Gender-wise, men led the pledged collateral, at 3083 while women pledged a total of 874 collaterals.

The number of loans extended to women significantly increased to 319 634, totalling ZiG 4,91 billion, a notable rise from 185 326 in December 2023.

Similarly, the youth segment saw a considerable increase in loan access, with 73 770 loans valued at ZiG 2,76 billion disbursed as of December 2024, from 57,216 loans.

“The active security interests had a corresponding loan amount of ZiG47,176 billion, registered by various institutions.

“A breakdown of these interests reveals that banking institutions held the largest share, with 1 339 active security interests valued at ZiG23,689 billion.

“Other notable contributors include law firms, with 190 security interests valued at ZiG 22,969 billion, microfinance institutions, with active security interests valued at ZiG388,972 million, contract financiers 6 security interests stood at ZIG 39,381 million, and other various creditors, with seven security interests valued at ZiG 89,443 million,” said, RBZ deputy Governor Dr Jesimeni Chipika while addressing delegates at the recently held global money week 2025.

The RBZ established the collateral registry for movable assets to expand the range of qualifying collateral accepted by lenders as part of the broader reforms to promote access to finance and enhance financial inclusion.

The activation of the collateral registry came at a time when many underserved Zimbabweans, especially in the informal sector, could not access bank loans, as many movable properties were not recognised as loan security.

This prompted the Government to draft legislation that allows the use of movable property as collateral to deal with this challenge.

The collateral registry is established in terms of the Movable Property Security Interests Act [Chapter 14:35], which allows the use of movable assets as security for loans.

According to the RBZ, the types of movable collateral that qualify for loans can differ from one lending institution to another.

Acceptable forms of movable collateral include agricultural products such as livestock, poultry, and crops, as well as industrial, commercial equipment, consumer goods and household items, agricultural equipment, inventory, and raw materials.

Additionally, gold coins, financial assets like accounts receivable and shares, can be used as loan collateral.

Intellectual property, including patents, copyrights, and trademarks, as well as natural resources like oil, gas, and minerals, are also acceptable forms of movable collateral for loan purposes.

It is expected that the establishment of a collateral registry will benefit small enterprises and household sectors.

The theme of this year’s Global Money Week, “Think Before You Follow, Wise Money Tomorrow,” was aimed at educating young people on the importance of critically evaluating information sources, promoting wise financial decision-making, and a secure financial future.
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