The Cabinet on Wednesday gave borrowers without preferred traditional collateral such as land a sigh of relief when it passed a bill for the creation of a centralized electronic registry for household goods to secure loans.
The move is aimed at widening the bracket of those able to access loans from commercial banks.
It is also an attempt to address the disadvantaged borrowers who do not have the traditional collateral that are required by the bank by backing their credit applications with the inclusion of house hold materials and office equipment.
“The bill will provide for creation of an electronic registry that will provide unique identification number for tracking those collateral already used to secure bank loans to enhance confidence of lending institutions and create an enabling environment to lend against movable assets as collateral,” read a part of the brief from the cabinet.
The movable assets such as house hold goods and office equipment have often been ignored by the banks as collateral due to lack of a central registry where they could log in their claim but with the bill that will be an advantage to lenders.