Register your crops, cows to secure loans
News
By
Macharia Kamau
| Dec 05, 2020
Small businesses hard hit by the coronavirus pandemic have been urged to use their moveable assets to secure recovery financing.
Business Registration Services (BRS) Director General Kenneth Gathuma said they would need to lodge details of their assets at the moveable assets registry, which is accessible to banks.
Through the registry, which falls under BRS, lenders are able to tell if another institution has advanced a loan using the same product as collateral.
The Movable Property Security Rights Act, 2017 increased the scope of assets that banks can use to advance credit to individuals and businesses without assets such as land or buildings. Gathuma said the Covid-19 pandemic had dealt a blow to many businesses, which now, unfortunately, lack sizeable immovable assets such as land to access credit.
He said the Movable Property Security Rights Act, 2017 has opened up financing opportunities for such businesses through movable assets, including machinery, computers, paintings, livestock and even crops.
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“The Covid-19 pandemic has created an economic downturn, and businesses are in distress on account of reduced business activity,” said Gathuma. “There are new realities that we need to accommodate, including different ways of doing and using different kinds of assets to secure credit that will enable businesses to continue operating as going concerns.”
He spoke when BRS hosted a virtual conference on post-Covid-19 recovery strategies for Micro, Small and Medium-sized Enterprises.
“We have a registry where you can put your secured rights to get access to credit easily with your assets as collateral,” added Gathuma.
Bartol Letica, a financial sector specialist in the International Finance Corporation in sub-Saharan Africa, said the moveable assets registry was a key enabler in increasing financial inclusion.
This is besides helping small companies ward off the adverse effects of Covid-19 on their operations.
emacharia@standardmedia.co.ke
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