Joint Report of the Finance and Economic Development and Small and Medium Enterprises and Cooperative Development on the Movable Property Security Interests Bill (H.B. 7, 2016)

JOINT REPORT OF THE PORTFOLIO COMMITTEES ON
FINANCE AND ECONOMIC DEVELOPMENT AND
SMALL AND MEDIUM ENTERPRISES AND COOPERATIVE DEVELOPMENT
ON THE MOVABLE PROPERTY SECURITY INTERESTS BILL

HON. CHAPFIKA:  Thank you very much Madam Speaker.  I rise to present the Portfolio Committee joint report of the Finance and Economic Development and Small and Medium Enterprises and Cooperative Development on the Movable Property Security Interests Bill (H.B. 7, 2016).

INTRODUCTION

The Movable Property Security Interests Bill which was gazetted on 28 November 2016, seeks to provide for use of movable property as security for purposes of obtaining loans from financial institutions. The Bill comes against the background in which government is stepping up its efforts to improve the ‘Ease of Doing Business’ in the country. The majority of Zimbabweans are facing challenges in securing bank loans, particularly capital to invest in their businesses, given that financial institutions require collateral security in the form of title deeds which most citizens do not have. Zimbabwean banks, which are the traditional sources of funding, are reluctant to provide loans to Small and Medium Enterprises (SMEs) and individuals who do not have immovable properties as collateral due to the high perceived risk associated with lending to SMEs and individuals. Therefore, the Bill will enable borrowers and lenders to recognize movable assets as collateral, thereby supporting credit financing secured with such assets. The Bill was well received by mostly Micro, Small and Medium Enterprises (MSMEs) and individuals in general, as it will create an opportunity to secure credit much easier than before.

METHODOLOGY

The Portfolio Committee on Finance and Economic Development together with the Portfolio Committee on Small and Medium Enterprises and Cooperative Development resolved to analyse the Bill jointly since it largely affects the MSMEs which the latter Portfolio Committee superintends over. In order to solicit the views of the public on the Bill and consistent with Section 141 of the Constitution of Zimbabwe, the two Committees conducted joint public hearings on the Bill. The hearings were held from 20 to 24 March 2017 in Mutare, Marondera, Harare, Chinhoyi, Bindura, Masvingo, Gweru, Bulawayo, Gwanda and Victoria Falls - thus ensuring that each of the country’s 10 provinces are consulted.

The two Committees would like to extend their sincere appreciation to all members of the public who participated during the hearings in their individual capacities and those that made written submissions as representatives of organizations. These include the Bankers Association of Zimbabwe, Zimbabwe Chamber of Small and Medium Enterprises, Microfinance Companies, Deposits Protection Corporation, lawyers and members of the public in general. Their valued contributions form part of this report with recommendations for consideration by the Hon. Minister of Finance and Economic Development.

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