General Credit Requirements by Zimbabwean Banks.

What is a Credit?

A credit is an agreement in which a borrower receives a sum of money or something else of value and commits to repaying the lender at a later date, typically with interest.

Credit can be used to purchase goods and services, or to borrow money for other purposes, such as education, home improvement, or starting a business.

Different types of credit, includes:

• Personal loans: Personal loans are typically used for small expenses, such as car repairs or medical bills.
• Mortgages: Mortgages are used to purchase a home.
• Business loans: Business loans are used to start or expand a business.
• Credit cards: Credit cards allow borrowers to borrow money up to a certain limit and repay it over time.
• Student loans: Student loans are used to pay for college or other educational expenses.

General Credit Requirements in Zimbabwe.

Credit requirements in Zimbabwe vary depending on the type of credit you are seeking. Requirements for a personal loan are different from the requirements for a mortgage.

However, there are some general credit requirements that apply to all types of credit in Zimbabwe. Regular income and a good credit history matters for borrowing consideration . A bad credit history attracts a higher interest rate.

Specific credit requirements for different types of credit in Zimbabwe includes:

• Personal loans: Personal loans are typically used for small expenses, such as car repairs or medical bills. The requirements for a personal loan vary depending on the lender, but you will typically need to have a good credit history and a regular income.
• Mortgages: Mortgages are used to purchase a home. The requirements for a mortgage are more stringent than the requirements for a personal loan. You will typically need to have a good credit history, a down payment, and a regular income that is at least three times the monthly mortgage payment. Very rare in Zimbabwe.
• Business loans: Business loans are used to start or expand a business. The requirements for a business loan vary depending on the lender, but you will typically need to have a business plan, a good credit history, and collateral.

If you are considering applying for credit in Zimbabwe, it is important to shop around and compare offers from different lenders. You should also make sure that you understand the terms and conditions of the loan before you sign any paperwork.

Here are some tips for improving your credit score in Zimbabwe:

• Pay your bills on time and in full each month.
• Keep your credit utilization ratio low. This means using less than 30% of your available credit.
• Avoid opening too many new credit accounts in a short period of time.
• Check your credit report regularly for errors and dispute any that you find.

Credit Requirements for Businesses.

The Bank will perform due diligence on the Borrowing Client/ Company based on the following information which is supposed to be submitted to the Bank at the time of facility application:

1. An application letter stating the specific requirements;
2. A Business Plan covering brief history of the company and a description of company’s business including products manufactured, customers and terms offered, suppliers and supplier terms, and nature of competition. The plan should also include management profile stating their age, experience and qualifications;
3. Financial Statements, with full notes;
4. Up to date management accounts and budgets (Incorporating underlying assumptions);
5. Current Aged Debtors and Creditors Analysis [in columnar form];
6. Cash flow projections for the next twelve months plus the underlying assumptions;
7. 12 months continuous Bank Statements;
8. Full names of Directors and Shareholders of the company (including their percentage shareholding) and a certified copy of current CR5 Form & CR6; ID copies and Proof of residences of directors
9. List of all subsidiaries or related companies (with common shareholding or directorship). A family tree will help to clarify position;
10. Facilities from other Banks showing type of facility, pricing, amount granted, amount utilized, security offered if any, and expiry date of facility;
11. Memorandum and Articles of Association of the Company and Certificate of Incorporation;
12. Security/Collateral Details.