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VOA慢速英语:Zimbabwe Considers Using Livestock, Vehicles as Loan Security

Source: VOA    2017-04-21   English BBS   Favorite  

Zimbabwe wants small business to be able to get credit to start or grow a business.

If the country’s Parliament approves a bill proposed last week, business owners will be able to use cows, cars, machines and other “movable property” to secure loans.

In most countries, people use their home or land they own to secure a bank loan. But in countries where the economy is struggling, many people do not have those assets.

If the bill passes, Zimbabwe will join other African nations, including Liberia, Ghana, Kenya, Lethoso and Malawi that use “movable assets” to secure loans.

Zimbabwe Considers Using Livestock, Vehicles as Loan Security

The law would let the Zimbabwean government consider “movable assets” as any “tangible or intangible property” that is not immovable.

Finance Minister Patrick Chinamasa introduced the bill so Zimbabwe’s informal businesses could get bank loans more easily.

The “movable assets” used to secure loans would be registered in a database set up by the central bank.

Chinamasa said banks have not changed their policies to deal with the current economy in Zimbabwe. The country used to have many more traditional business loans that were secured by land and homes.

But that changed when President Robert Mugabe seized farms and other property held by white owners between 2000 and 2008. The farms became less productive and the country’s economy declined.

Instead of having large farms, Zimbabwe became a country of smaller farms and smaller businesses. The economy became less traditional and more informal. But the banks did not adjust.

Chinamasa said he wants banks to change their attitudes in order “to reflect our economic realities.”

Chinamasa said he wants loans to small businesses to grow. So far this year, small business loans have accounted for only $250 million out of $4 billion of bank loans.

In his proposal to Parliament, Chinamasa said moveable assets increased the number of loans given to small businesses in countries where non-traditional assets were accepted as security. He added that interest rates in those countries also fell.

I’m Dan Friedell.

Dan Friedell adapted this story for Learning English based on reporting by Reuters. Mario Ritter was the editor.

Do you think the Zimbabwean economy will be helped by this banking change? We want to know. Write to us in the Comments Section or on our www.hxen.com .


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