William Mukurazita’s deposit at the bank has four legs and moos.
Zimbabwe’s first “Cattle Bank” has just opened its books in a unique kind of banking where owners bring in their animals as collateral against cash loans.
For many rural poor in this southern African country once wracked by world-record inflation, it’s the first bank account they’ve ever had.
“Cattle banking is the only way owners can get monetary value for their animals without having to sell them,” bank executive Charles Chakoma told The Associated Press amongst fields and small farming plots near Marondera, east of Harare, the capital.
Owners accrue interest and have the option to get back their cattle after an initial two years or leave them with the bank for longer. Depositors can get loans of an equal value of the cattle they have put in the bank.
The bank, which owns several fast food outlets across the country, says it also will slaughter aging cattle and replace them with more productive cattle of the same value.
Mukurazita (69) and his wife, Elizabeth (66) kept about 70 head of cattle at Masomere village, 140 km from Harare. But poor health stopped them from looking after their herd and at least 20 animals died or were stolen, said Elizabeth Mukurazita.
Now they have “deposited” 24 cattle at the TN Bank, named after its founder, financier and social innovator Tawanda Nyambirai. The couple now has $10,000 worth of cows in the bank.
Interest can be paid in cash or cows. The Mukurazitas say they’d prefer it in cows so that their son can take over managing a new herd and get more land later.
Owners are issued with the bank’s ‘Certificate of Cattle Deposit’ as proof of a transaction.
In traditional rural society, cattle symbolise wealth and play a role not just in farming but as marriage dowries, funeral sacrifices and appeasers of ancestral spirits. — AP
Zimbabwe’s first “Cattle Bank” takes the animals as collateral against cash loans