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D-dead-capital Dictionary

Dead capital

An asset that has value but cannot be sold, pledged or borrowed against because ownership cannot be proved

All termsIntroduced in Module 1Open the Toolkit
An open dictionary on a farm office desk
Plain meaning
An asset that has value but cannot be sold, pledged or borrowed against because ownership cannot be proved
How to use it
Ask whether the land, cattle or buildings could be pledged to a bank today. If not, they are dead capital, and the first task of the venture plan is to bring them to life through title, a registered lease or records.
South African benchmark
Article 128's comparison: South Africa's titled commercial land is bankable, while much communal land is not.
Country notes
Communal and resettlement land in Zimbabwe and Zambia, and tribal land in Botswana and Namibia, is often dead capital because it cannot be mortgaged.
Go and read
C1
Calculate it
No calculator; the term is applied in the venture plan narrative.
Library sources
LIB-A018, LIB-A022
See also
Title deed, Collateral, Customary tenure
Two hectares measured out, with the four numbers that make land a business assetTwo hectares, measured as a business assetHectare 1100 m x 100 mHectare 210,000 m²100 m100 m100 mLease value a yearthe return to beatSale valuethe capital tied upHolding costfencing, rates, upkeepTenure documentwhat a bank lends on1 hectare = 10,000 square metres. Two hectares is a 200 m x 100 m block.
From Module 1, The Farm as an Asset, where this term is introduced.

Introduced in C1 The Farm as an Asset.