This archive report was first published on 19 November 2019.
Kenya's banking sector has witnessed a significant shift in the way lenders provide short-term loans to individuals and small to medium-sized enterprises (SMEs). According to the Shared Value Report 2019 by the Kenya Bankers Association (KBA), household items have emerged as the most commonly used moveable assets to secure these loans.
As of May 2017, a total of 198,873 loans were given out by KCB, KWFT, and Co-operative Bank using household items as collateral. This trend is a departure from the traditional use of immovable assets such as land and buildings, which are often beyond the reach of most Kenyans.
Motor vehicles, furniture, office equipment, and livestock are also being used as collateral for bank loans. In fact, as of January 2019, there were 183,487 loans registered on the Moveable Assets Registry worth KSh 3.65 trillion (USD 36.5 billion).
The registry, which was launched in May 2017, allows borrowers to register their collateral at the eCitizen online platform. This innovative system has the potential to transform the way Kenyans borrow, as stated in the KBA report.
"The diversity of assets registered on the eCitizen platform demonstrates the immense potential of this innovative system which is sure to transform how Kenyans borrow," said the KBA report.
