Credit Requirements by Banks in Zimbabwe.
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.
- An application letter stating the specific requirements;
- 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; - Financial Statements, with full notes;
- Up to date management accounts and budgets (Incorporating underlying assumptions);
- Current Aged Debtors and Creditors Analysis [in columnar form];
- Cash flow projections for the next twelve months plus the underlying assumptions;
- 12 months continuous Bank Statements;
- 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
- List of all subsidiaries or related companies (with common shareholding or directorship). A family tree will help to clarify position;
- Facilities from other Banks showing type of facility, pricing, amount granted, amount utilized, security offered if any, and expiry date of facility;
- Memorandum and Articles of Association of the Company and Certificate of Incorporation;
- Security/Collateral Details.
What is Security/Collateral?
Security or collateral details when borrowing refer to the assets that a borrower pledges to a lender as security for a loan. If the borrower defaults on the loan, the lender can seize and sell the collateral to recoup their losses.
The type of collateral that is required will vary depending on the type of loan and the lender. For example, a mortgage lender will typically require the borrower to pledge the home that they are purchasing as collateral. A car loan lender will typically require the borrower to pledge the car that they are purchasing as collateral. A business loan lender may require the borrower to pledge business assets, such as equipment or inventory, as collateral.
