Banking & Finance

Banking and finance law is concerned with the lending of money and with the security taken to support it.

A financing transaction has two sides and both need legal work. The lender needs facility documentation that states the terms clearly, and security that will be effective if the borrower defaults. The borrower needs to understand the obligations it is taking on, the events that will trigger default, and the assets it is putting at risk.

Security in Zambia takes several forms: mortgages and charges over land, debentures over a company’s assets and undertaking, pledges, guarantees, and assignments of receivables. Each must be properly created and then perfected, by registration at the Patents and Companies Registration Agency where a company grants it and at the Lands and Deeds Registry where land is involved. Security that is not perfected within the statutory period may be worthless against a liquidator or a competing creditor.

The sector is regulated. The Bank of Zambia supervises banks and financial institutions under the Banking and Financial Services Act, and lenders must also meet anti-money-laundering and customer due-diligence requirements.