This archive report was first published on 18 September 2019.
Published on September 18, 2019, a Bill aimed at protecting guarantors from loan defaults has sailed through the National Assembly.
President Uhuru Kenyatta's signature is now required for the Law of Contract (Amendment) Bill, 2019, which proposes that creditors should first auction the assets of the defaulting borrower before seizing the property of the guarantor.
The Bill, sponsored by Juja MP Francis Waititu, was approved through its third reading without any amendments.
Leader of Majority Aden Duale corrected a typographical error on the proposed law before it was cleared for onward transmission to the President.
The current law allows creditors to seize the property of the guarantor in case of default by the principal borrower, a practice that has led to increased cases of lenders taking over guarantors' property.
The Bill seeks to end this practice and ensure that the assets of a guarantor are protected.
Despite Attorney-General Kihara Kariuki's directive to delay debate on the proposal, the Bill was approved through Parliament, defying the directive.
