A bank has begun accepting cattle as collateral for cash loans in Zimbabwe, the Associated Press has reported. Depositors can get loans of an equal value of the cattle they have put in the bank.
“Cattle banking is the only way owners can get monetary value for their animals without having to sell them,” TN Bank executive Charles Chakoma said on Wednesday.
For many rural poor in the southern African country once wracked by world-record inflation, the “cattle bank” is the first bank account they have ever had.
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.
In the event the owner fails to repay the loan, the bank keeps the animals.
When an owner dies, a close member of the family can take over payment of the loan and ultimately get the cattle back. The bank, which owns several fast food outlets across the country, says it will also slaughter aging cattle for beef and replace them with more productive cattle of the same value.
Read more at aljazeera.com