27 Jan 2022

Batswana will now be able to use their movable property as security for loans following Parliament’s approval of the Movable Property (Security Intelligence) Bill Wednesday. When presenting the bill before Parliament on Tuesday, the Minister of Finance and Economic Planning, Ms Peggy Serame said banks were reluctant to lend against movable property when the legal framework governing collateral were unclear and unpredictable. 

“This is a barrier to financial inclusion, especially regarding access to credit by small and micro enterprises, which often do not have fixed property that can be used as collateral,” she said. 

The minister said government engaged the World Bank to undertake a study of Botswana’s legal framework governing secured transactions. 

The World Bank made recommendations regarding the necessary reforms to improve access to credit. She said the study found out that Botswana’s legal framework governing secured transactions was fragmented and ineffective in supporting lending on the security of movable property. 

The Bill provides for the creation of security interests in movable property to contribute to economic development, harmonise secured transaction law and eliminate existing conflict of laws in order to promote the financing of trade, and make security interests in movable property effective against third parties, she said. 

Movable property includes intellectual property rights, vehicles, livestock, receivables, crops, negotiable documents and instruments. 

Under the bill, the Collateral Registry Office will be established to provide for a single comprehensive registration regime for secured transactions in movable property. Members of Parliament fully supported the bill, with some calling for regulations to make it easy for Batswana to access credit facilities. 

The Vice President, Mr Slumber Tsogwane said the bill was important, as it would address illicit transactions. 

He further said it was also in line with the ruling party’s commitment to building an inclusive economy and eliminating poverty. Francistown South legislator, Mr Wynter Mmolotsi said he supported the bill, but suggested that Batswana should be allowed to borrow against their pensions. 

He said, at one point he brought a motion before Parliament for Batswana to be allowed to borrow against their pension, but that the motion was rejected.

MP Mmolotsi said Batswana were going through hard times due to COVID-19 and allowing them use of their pensions as collateral would ease their troubles. Member of Parliament for Molepolole North, Mr Oabile Regoeng said commercial banks should be brought on board, adding the Collateral Registry Office should be established in major villages and towns across the country. 

He welcomed the bill as he said it would address financial inclusion, and that small and micro entrepreneurs would benefit. Gaborone North MP, Mr Mpho Balopi also supported the bill saying it would make positive changes in the lives of people in the informal sector. 

He also said the regulations should be in place to ensure that Batswana were not charged high interest rates. 

Jwaneng-Mabutsane legislator, Mr Mephato Reatile and MP Fidelis Molao of Shashe West both supported the bill, but called for adequate control for it to serve the intended purpose. 

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