Securing Credit for Growth: The Case for a New Asset Register in Kenya

This paper provides an overview of Kenya’s current policy, and discusses the legal and practical framework for registration of movable asset collateral, including leases. It outlines the future impact of a modern movable asset registry in increasing access to credit for small and medium enterprises (SMEs). The paper examines Kenya’s Vision 2030 as the established policy platform for the potential development of a movable asset registry as well as other relevant policy goals established in connection with it. In addition, it analyzes the existing legal framework to determine and address specific challenges arising from the multiplicity of laws currently governing movable property secured financing. The following sections are covered in detail:

• Introduction to Kenya’s Vision 2030 with a focus on its impact on SMEs;
• Laws applicable to lending against movable assets with a focus on the Chattels Transfer Act, Hire Purchase Act, Companies Act, Income Tax Act, and existing movable asset registries;
• Local perspective on the implementation of a movable asset registry with a focus on different movable assets that can or cannot be used as security;
• Registry models used globally and best practices;
• Suggestions and recommendations to develop an appropriate movable asset registry for Kenya.