Knowledge

Author: Ollen Machimbirike

Category:

Date: 7 September 2016

Bank of Zambia launches collateral registry

Image result for zambia flag
While much attention was drawn to the recent presidential elections, the Bank of Zambia (BoZ) and the Patents and Companies Registration Agency (PACRA) recently announced the launch of a collateral registry. The registry is intended to facilitate SMEs to access funding using other forms of movable property as collateral security.

“The launch of collateral registry will increase access to funding, especially for SMEs, and lead to better terms for loan contracts. Currently many SMEs are excluded from the formal credit market largely because they lack assets that can serve as collateral, although they may generally have a wide array of productive assets that could secure a loan but a legal framework prevents this.” said Dr. Denny H. Kalyalya, Governor of Bank of Zambia.

Other benefits of collateral registry include a better diversification of assets held by financial institutions and improved competition in the financial sector by enabling both banks and non-bank financial institutions to offer secured loans. Other countries such as Ghana, Malawi, Zimbabwe, Liberia and Nigeria have taken steps to implement collateral registry with the same vision.

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