It recently became law, laying the foundation for borrowers to use moveable collateral, such as equipment, machinery, inventory, and other types of moveable property to access finance.
This new law will make it easier for small businesses and individuals who do not have access to traditional collateral, like land or real estate, to take out a loan and grow their business. By 2020, the projects aims to generate $2 billion in financing to firms and benefit 6,500 SMEs, 1,200 micro enterprises, and 1,200 women entrepreneurs.
The law also creates an important basis for protecting the rights of all types of regulated financial institutions, microfinance institutions, and leasing companies. By encouraging them to provide financing secured by moveable collateral, this law will help promote investment and economic growth in Zambia.
Elaine MacEachern, Global Specialist, Secured Transactions and Collateral Registries for the World Bank Group’s Finance and Markets Global Practice, said: “This newly passed legislation is a critical first step in developing a secured lending framework in Zambia. To complete this effort we will continue working with Zambia to build an online personal property security registry system, and help local financial institutions introduce secured lending based on movable property collateral.”
For more information contact Pauline Delay, firstname.lastname@example.org
First Published: 1/6/2016