Solwezi DC cheered with proposed new lending bill
Solwezi, Jan 17/14, ZANIS—–Solwezi District Commissioner, Crispin Likando, has been cheered with the on-going consultations on the bill aimed at repealing the lending practices in the country to make it easier for commercial banks to start accepting personal movable assets as collateral for acquiring loans.
Mr Likando says the existing legislation for lending has several challenges because it only considers immovable assets, such as land and buildings, as collateral.
However, he says with the repealing of the law to include personal property to become acceptable as collateral by banks and other lenders it will increase medium and small scale business enterprises access to financing.
The DC was speaking when he opened a two day stakeholder consultative meeting organised by Bank of Zambia (BOZ), Patents and Companies Registration Agency (PACRA) and the Ministry of Commerce Trade and Industry.
The meeting, that closed today, was seeking to receive comments on three draft bills that govern lending, company formation as well as insolvency and bankruptcy.
Mr Likando said the involvement of business people and representatives of financial institutions in Solwezi has provided an opportunity for them to make an input to the legal framework that affects them in various ways.
He also hailed government for coming up with bills to repeal the outdated Company and Insolvency Acts aimed at enhancing good corporate governance and including provisions for salvaging companies from going under.
And a senior inspector at Bank of Zambia, Banji Milambo, said drafting of a bill on personal property and security interest emanates from difficulties small businesses and individuals have been facing to access credit from commercial banks using movable assets as collateral.
Mr Milambo said most banks refuse to accept movable assets as collateral because there is no legal system or registry to secure such property for lenders to claim once the borrower defaults.
He said to resolve the problem the draft bill provides for the creation of a registry at PACRA offices where immovable assets, such as cars, tree plantations and stock inventory could be registered and secured for lenders to sell to liquidate a loan.