[00:00.00]Zimbabwe wants small business to be able to get credit to start or grow a business.
[00:09.72]If the country’s Parliament approves a bill proposed last week,
[00:14.98]business owners will be able to use cows, cars, machines and other “movable property” to secure loans.
[00:26.53]In most countries, people use their home or land they own to secure a bank loan.
[00:34.94]But in countries where the economy is struggling, many people do not have those assets.
[00:43.35]If the bill passes, Zimbabwe will join other African nations, including Liberia, Ghana, Kenya, Lethoso and Malawi that use “movable assets” to secure loans.
[01:02.57]The law would let the Zimbabwean government consider “movable assets” as any “tangible or intangible property” that is not immovable.
[01:16.68]Finance Minister Patrick Chinamasa introduced the bill so Zimbabwe’s informal businesses could get bank loans more easily.
[01:28.10]The “movable assets” used to secure loans would be registered in a database set up by the central bank.
[01:37.62]Chinamasa said banks have not changed their policies to deal with the current economy in Zimbabwe.
[01:46.72]The country used to have many more traditional business loans that were secured by land and homes.
[01:56.77]But that changed when President Robert Mugabe seized farms and other property held by white owners between 2000 and 2008.
[02:11.77]The farms became less productive and the country’s economy declined.
[02:18.66]Instead of having large farms, Zimbabwe became a country of smaller farms and smaller businesses.
[02:29.74]The economy became less traditional and more informal.
[02:36.09]But the banks did not adjust.
[02:39.98]Chinamasa said he wants banks to change their attitudes in order “to reflect our economic realities.”
[02:51.85]Chinamasa said he wants loans to small businesses to grow.
[02:57.75]So far this year, small business loans have accounted for only $250 million out of $4 billion of bank loans.
[03:12.08]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.
[03:32.15]He added that interest rates in those countries also fell.
[03:37.77]I’m Dan Friedell.