Man in hot soup for using relatives’ title deeds as collateral to get US$1m bank loan

A Harwre man- (Tonderai Chikuni) – who allegedly used his relatives’ title deeds as collateral when he borrowed US$1 million from two local banks, and failed to service the loans, appeared in court yesterday facing fraud charges.

Chikuni allegedly convinced his aunt, Florence Rwidzai Madake, to release the title deed to her Borrowdale West property, valued at a whopping $460,000, to secure a 90-day loan of $252,842.29 from BancABC.

He also convinced his cousin, Farai Chikuni, to release the title deed to his Glen Lorne property, valued at $600,000, to secure a 90-day loan of $225,000 from NMB Bank.

Chikuni failed to service both loans.

Banks require collateral from customers as security in case of failure to service loans.

The most commonly accepted assets that are used as collateral include property, bonds, gold, savings certificates, deposits and vehicles.

The Reserve Bank Zimbabwe recently updated its collateral registry so that loan applicants could now make use of their movable property, including livestock, household goods and vehicles, among other things, to secure funding.

The collateral registry is a publicly available database that allows borrowers to prove their creditworthiness.

Zwnews