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.
William Mukurazita, 69, and his wife, Elizabeth, 66, kept about 70 head of cattle at Masomere village, 140km from Harare.
But poor health stopped them from looking after their herd and at least 20 animals died or were stolen, Elizabeth Mukurazita said.
Now they have “deposited” 24 cattle at the TN Bank, named after its founder, financier and social innovator Tawanda Nyambirai.
A veterinarian checks the animals and the bank pays to transport them to paddocks it has bought across the country for fattening and cross-breeding programmes.
Owners are issued with the bank’s `Certificate of Cattle Deposit’ as proof of a transaction.
Only 20 percent of Zimbabwean cattle are in commercial ranches. The rest – some 3.5 million village animals – are valued at more than $1 billion, Chakoma said.
The TN Bank wants to reassure Zimbabweans that despite years of world record inflation their bovine savings are safe, he added.
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.
Many cattle owners are reluctant to give up such a valued status symbol, but Chakoma said cattle banking eases the burden on the elderly, left behind as young people head for the cities.