Dennis Ndlovu
Business Reporter
Amid persistent liquidity challenges, constrained access to formal credit, and rising inflation, a growing number of Zimbabweans are leveraging personal household assets such as refrigerators, beds, and other movable property as collateral to access microloans. This trend highlights deepening financial distress and the rising demand for alternative financing solutions as traditional income streams remain under pressure.
With inflation and unemployment remaining high, financial institutions are focusing more on the working poor by offering asset-backed loans, raising concerns that survival credit could become a new form of predatory lending.
The Reserve Bank of Zimbabwe (RBZ) revealed in its 2025 Mid-Term Monetary Policy statement that some lenders are now providing loans secured by household property.
The central bank expressed concern about the social risks linked to this trend and called for tighter regulation and enhanced consumer protection.
As wages stay flat and formal credit remains scarce, many families have no option but to pledge essential household goods just to afford food — highlighting the fragile state of Zimbabwe’s economic recovery and the human toll of financial exclusion.
“As at June 30, 2025, the Collateral Registry recorded 3 329 active registrations with a combined principal value of ZiG56,3 billion,” RBZ governor John Mushayavanhu said in the 2025 Mid-Term Monetary Policy statement.
Microfinance institutions were the leading users with 1 384 registrations, followed by banks with 1 167 entries.
“In terms of the value of movable collateral, banks accounted for ZiG32 billion, while law firms registering on behalf of clients recorded a total value of ZiG23,9 billion.”
He noted that since its launch in November 2022, the Collateral Registry had logged a total of 7 074 security interest notices on movable assets.
“Of these, 3 329 notices (47%) remain active, while 3 745 (53%) have expired. Lending institutions continue to expand the types of movable assets which qualify as collateral,” Mushayavanhu said.
“During the half-year to June 30, 2025 collateral ranged from household goods, private vehicles, trucks, agricultural equipment to shares.”
The Collateral Registry recorded about 12,978 types of collateral, with household goods leading at 4,006, followed by private vehicles (2,597), Notarial General Covering Bonds (1,661), trucks (1,440), and agricultural equipment (955).
“In pursuit of financial stability and fostering consumer protection, the Reserve Bank undertook a number of market conduct activities to assess microfinance institutions’ compliance with the Core Client Protection Principles as enunciated in the First Schedule of the Microfinance Act [Chapter 24:30],” Mushayavanhu said.
“In the February 2025 Monetary Policy statement, the Reserve Bank highlighted that it had received a number of complaints against microfinance institutions regarding predatory lending practices.”
He added that surveys and market conduct inspections completed so far found that microfinance institutions generally complied with the Microfinance Act and the Consumer Protection Framework.
“There were, however, incidents of non-compliance relating to disposal of clients’ assets without the requisite court orders and over-deduction of monthly payments,” Mushayavanhu said.
“The Reserve Bank has instituted supervisory action on the non-compliant institutions and will continue to intensify its market conduct surveillance on the sector during the year to ensure compliance.”
Zim GBC News©️2025