EDITORIAL: Goods registry overdue

The creation of an electronic registry for household goods, live animals and office equipment – otherwise called movable goods – is an idea that has been long overdue.

The International Finance Corporation’s (IFC) offer of financing that is needed to ensure the fruition of this idea is therefore spot on. This is because such a register has the potential to unlock millions, if not billions, in new loans from the banking industry.

Currently, the uncertainty in the market is such that banks will not accept movable goods as collateral because they do not have control over their disposal -- there being no registry to indicate change of hands from one owner to the other.

Besides, many financial institutions do not give loans on the basis of demonstrable cash flows alone, as they require to satisfy themselves that payment of a loan is guaranteed even if the cash flows were to cease. It therefore leaves only those with land title deeds or logbooks to access loans.

The critical thing about this however is that many small and micro-level businesses require small loan amounts that can better be secured with household goods. This means that establishment of a platform that accepts such collateral would go a long way in alleviating existing difficulties that SMEs face in accessing loans.