Revolutionizing Property Registration for Financial Inclusion

By Francis Maingaila

Lusaka, Zambia24 (27-03-2024) – In the ever-evolving landscape of property registration, the quest for efficiency, transparency, and accessibility remains paramount.

Lloyd Musonda, Patent and Companies Registration Agency (PACRA) Business Development Manager, shed light on the strategies and challenges faced by financial service providers during a one-day workshop organized by Musika Initiative Development Zambia Limited.

From embracing multiple registration systems to navigating the complexities of financing, Musonda’s insights offer a comprehensive understanding of the dynamics at play.

Exploring the key takeaways from Musonda’s presentation highlights the pivotal role of property registration in driving financial inclusion and fostering economic growth.

Musonda delved into the intricacies of property registration systems, shedding light on key strategies and challenges faced by financial service providers.

Emphasizing the potential of multiple property registration systems in simplifying property registration regulations, Musonda stated that leveraging this approach would help institutions enhance efficiency and clarity in property transactions, ultimately streamlining processes for all stakeholders involved.

Financial service providers exhibit reluctance towards utilizing properties for monetary transactions due to perceived risks. Traditional methods are favored for their perceived safety, highlighting the importance of addressing concerns around security and reliability in digital financial services.

According to Musonda, complex property registration processes present significant hurdles for financial service providers seeking to extend financing. “These challenges impede their ability to secure loans from banks, underscoring the critical need for streamlining registration procedures to facilitate easier access to capital,” he explained.

Registries established under the Companies Act play a pivotal role in enhancing transparency and efficiency in registration processes. “By facilitating the registration of financing statements and assets, these registries contribute to a more transparent and robust financial ecosystem,” he suggested.

The objectives of these registries align with broader financial inclusion goals, aiming to promote mobile-based lending, establish unified registers for security interests, and expand access to credit for small businesses.

Adherence to legal principles outlined in the act is essential for ensuring legal protection and understanding the registration process. “These principles serve as the foundation for the operations of financial institutions, providing clarity and certainty in transactions,” he explained.

“Registration of financing statements serves as a crucial mechanism for ensuring legal protection and security for financial service providers, safeguarding their interests in transactions and mitigating risks,” he added.

Clarity regarding the scope of assets protected under the act and jurisdictional boundaries is paramount, particularly concerning movable assets. “This understanding enables stakeholders to navigate legal frameworks effectively and safeguard their interests,” he noted.

The three methods of creating encumbrances—registration, control agreement, and possession—offer avenues for securing assets. Among these, registration stands out as the most effective in providing legal certainty and priority, offering significant benefits to SMEs seeking to utilize movable assets as collateral.

The primary purpose of registry systems is to establish priority for the first registrant, empowering SMEs to leverage movable assets as collateral effectively.

Enabling efficient searches and providing legal certainty, these systems facilitate smoother transactions and bolster economic growth.

Musonda underscores the importance of effective property registration systems in fostering transparency, efficiency, and financial inclusion.

By addressing challenges and embracing innovative approaches, stakeholders can unlock opportunities for growth and development in the financial landscape.