The Department of Registrar General has said financial institutions’ response to the collateral registry system has been overwhelming as many banks are using the system.
The system was introduced in Malawi to allow banks and other lenders to register movable assets such as vehicles and maize mills which they have accepted as collateral for loans.
According to the Deputy Registrar General Chikumbutso Namera, since the inception of the system the response has been overwhelming.
“The collateral registry started in 2013 and the response has been phenomenal as almost all the financial institutions have registered and they are happy with it,” said Namera.
Namera said the collateral registry allows lenders to register vehicles, farm produce, livestock and equipment as collateral but not land and houses.
According to Namera, tobacco companies that provide loans to farmers are also using the system and it is helping a lot of farmers as they are able to access loans.
Commenting on the same, FINCA’s legal assistant Catherine Kumilamba said her organisation started using the system in 2015 and it has been great for them.
She said the system is user friendly and it is a continuation of what FINCA has been doing all along as it has always allowed businesspeople and farmers get loans using other collateral rather than houses and land.
“The collateral registry system is user friendly and since 2015 it has been overwhelming and has opened doors to other businesses,” said Kumilamba.
The World Bank Group supported the establishment of the collateral registry in Malawi.