The Zimbabwe Stock Exchange (ZSE) has launched a new entity, Debtbridge, to deepen activity on the Zimbabwe Emerging Enterprise Exchange (ZEEX) and improve access to finance for small and medium-sized businesses.
Debtbridge will provide custodial and administrative services for securities pledged by borrowers seeking financing, creating a formal structure through which assets such as property can be held in trust as security for loans.
ZSE head of markets Mr Edwin Mtami said Debtbridge was established as part of the exchange’s broader strategy to expand its business and strengthen the infrastructure supporting Zimbabwe’s capital markets.
He was speaking during a Public Accountants and Auditors Board (PAAB) financial reporting workshop held last Friday.
“Debtbridge is more like a custodian,” he said.
He explained that under the arrangement, a borrower seeking, for example, US$500 000 to finance a small business could use a property, such as a house, as collateral for the loan.
The borrower would provide the title deeds and consent to the security being held in trust by Debtbridge, with a mortgage bond registered in favour of the entity.
“You sign an agreement to say, I consent to my title deeds being held in trust by Debtbridge and that a mortgage bond can be registered in favour of Debtbridge so that they can hold the security,” Mr Mtami said.
The arrangement is intended to provide greater assurance to financiers while creating a formal mechanism for administering collateral pledged against loans.
Debtbridge would also be responsible for collecting repayments and remitting the funds to the relevant parties, earning an administration fee for providing the service.
“Debtbridge would then be responsible for collecting money and passing it on to this person. We get an admin fee for that,” Mr Mtami said.
The launch comes as the ZSE seeks to broaden the role of ZEEX in providing smaller and emerging businesses with access to alternative sources of capital beyond conventional bank lending.
ZEEX was established to provide a platform through which emerging and smaller enterprises can raise capital and gain access to formal capital markets, while also creating investment opportunities for investors.
The exchange has been developing products and market infrastructure aimed at supporting the growth of smaller businesses, particularly those that may face challenges accessing traditional sources of finance.
The introduction of Debtbridge is expected to complement these efforts by providing a structured mechanism for managing collateral used to secure funding.
For businesses, the arrangement could help unlock financing by allowing assets to be formally administered as security, while giving financiers an additional layer of assurance over pledged assets.
Mr Mtami said the initiative formed part of the ZSE’s wider efforts to grow its business and develop new services around the capital markets ecosystem.-herald
