CREDIT: The ability to obtain goods or services before payment, based on a contractual agreement that enables repayment at a later stage, e.g. loans.

DEBT: A sum of money that is owed when credit is used.

DEBT-TO-INCOME RATIO: A personal finance measure that compares debt payments to overall income.

INSTALMENTS: Fixed repayment amount over a period of time, in repayment of credit.

LENDER: A person, group or institution that makes money available to people with the expectation that it will be paid back with interest.

INFLATION: The rate at which the price for goods and services increases over a period of time. For example, ZWL1000 will buy more goods and services this year than it might for the same goods and services next year.

INTEREST: Money that is charged at a particular rate for the use of credit.

COMPOUND INTEREST: When you make a loan or a deposit, interest is calculated for the first period (be it for a month or a year depending on the loan) and it is added to the original total. The interest for the next period is calculated on the gross value of that first period and added to the gross value. This is described as accumulating interest on interest.

HOME LOAN: A loan acquired from a financial institution to buy a home. It is often called a mortgage or bond.

CHIMBAZU LOAN: A loan acquired from an informal moneylender who lends out money at high interest rates. Chimbadzo Money Lenders often use unorthodox methods to collect money owed.

HIRE PURCHASE: A system by which a purchase becomes yours after a certain number of payments through an instalment plan e.g. furniture or a car.

DEBT CONSOLIDATION: This is when you settle all your outstanding debts from various service providers with a loan from one service provider and then negotiate an interest rate.

CREDIT REPORT: A detailed report of an individual’s credit history prepared by the credit bureau. It includes all personal information on payment history and determines your credit rating which could affect your ability to acquire future credit or employment.

CREDIT RATING: A rating given to individuals based on their payment history. You are a good or bad payer and your rating will reflect this.

SEQUESTRATION: This is the surrendering of your estate, a process instituted by the court to help people that are no longer able to pay their debts due to circumstances, which they cannot control.

BLACKLISTED: When you do not pay your debt, you may receive a court order from the service provider, which if registered against your name, may result in you being blacklisted. This means that you will not be able to get any new credit until you have paid all your debt.

JUDGMENTS: An order from a court of law which compels you to make outstanding payments or enables the creditor to repossess your valuables and sell it to recover the debt you owe.

NOTICE: A formal document from the creditor to the lender, which tells them that they have missed a payment(s) and asks them to start repaying their debt or consider their options to manage their debt. It also lets them know that legal action may follow.

THE BANKING ACT [ CHAPTER 24:20] sets rules and regulations for the credit industry to promote fair access to credit, prevent the reckless granting of credit and guide debt rehabilitation processes.

THE RESERVE BANK OF ZIMBABWE was established as the Credit Regulator under the Reserve Bank of Zimbabwe Act [Chapter 22:15] is responsible for the regulation of the Zimbabwean credit industry. It is tasked with carrying out education, research, policy development, registration of industry participants, investigation of complaints, and ensuring enforcement of the Act.

The Consumer Contracts Act: serves to protect consumers and regulate Financial Service Providers. It ensures fair and honest consumer dealings within the financial industry. This Act however does not apply to services offered by banks as banks are regulated by the provisions of the Banking Act.

MONEY LAUNDERING AND PROCEEDS OF CRIME ACT [CHAPTER 09:24]: serves to fight financial crime, such as money laundering, tax evasion, and terrorist financing activities through the requirement of having to prove identity in all financial transactions.

NAEDO: The Non-Authenticated Debit Order System used by various service providers to improve the successful collection of money once sufficient funds are available. It tracks when money enters their customer’s accounts to ensure that installments or premiums are paid.