Bill allowing use of crops to secure loans signed into law

A pyrethrum farmer in Kisii County on May 7, 2017. PHOTO | BENSON MOMANYI | NMG
A pyrethrum farmer in Kisii County on May 7, 2017. PHOTO | BENSON MOMANYI | NMG  

President Uhuru Kenyatta today signed into law the Movable Property Security Rights Bill 2017, which enhances the ability to access credit using movable assets.

The new law (see download link on the right) allows the use of personal property as collateral for loans, establishes an online collateral registry and creates the office of the Registrar of security rights.

The move is expected to increase access to credit by widening the pool of collateral assets to include property such as livestock, crops and household goods.

The online registry will allow lenders to search the database for credit information on both loan seekers and the movable asset used as collateral.

The Bill was tabled in parliament in November last year by Majority Leader Aden Duale.

Fiscal sector reform

The law is only the latest reform introduced by the State to Kenya's financial sector, coming after the president assented to the Proceeds of Crime and Anti-Money Laundering (Amendment) Bill 2017 in March and the Banking (Amendment) Bill 2015 that capped loan interest rates in August last year.

Mr Kenyatta signed the Bill Wednesday before he travelled to the United Kingdom to attend the 3rd London Conference on Somalia.

Deputy President William Ruto, National Assembly Speaker Justin Muturi, Solicitor General Njee Muturi and Mr Duale witnessed the signing of the Bill into law.