How cows, crops and furniture could unlock Sh3.7tr in loans

There are approximately seven million micro, small and medium enterprises (MSMEs) in the country. Of these, more than 80 per cent are informal and unlicensed – that’s four in five MSMEs.

As a result, despite how critical a position these businesses hold in our economy, they face many challenges, key among them, accessing loans to grow their enterprises.

This reality led to the Movable Property Security Rights Acts 2017, which made it possible for banks to lend to individuals and SMEs that have assets that are not land related. This included household goods, livestock and even the stock in their shops.

Borrowers only need to register these assets on the eCitizen online platform. Banks can then use the collateral registry to determine a borrower’s risk profile and the amount the qualify for.

In a report by Financial Sector Deepening, as at the end of January 2019, there were 183,487 loans registered on the Moveable Assets Registry that’s now worth Sh3.65 trillion.

According to the latest Banking Sector Shared Value Report by the Kenya Bankers Association, 198,873 household items have been listed on the registry as collateral since May 2017 to date. Others items listed include motor vehicles (86,010), furniture (84,626), livestock (27,785) and crops (2,013).

Several banks in the country are using the registry to advance credit to individuals and small businesses. For instance, you can secure a loan from KCB, Equity Bank, KWFT and Co-operative Bank using the furniture in your home or business. KCB and Equity also offer loans against livestock.

And if you’re a musician, Unaitas will advance you a loan if you can demonstrate you have performance contracts lined up.