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{
    "id": 720139,
    "url": "https://info.mzalendo.com/api/v0.1/hansard/entries/720139/?format=api",
    "text_counter": 170,
    "type": "speech",
    "speaker_name": "Hon. A.B. Duale",
    "speaker_title": "",
    "speaker": {
        "id": 15,
        "legal_name": "Aden Bare Duale",
        "slug": "aden-duale"
    },
    "content": "rates, hidden charges, non-disclosure of pertinent information by the lenders and above all, unfair denial of access to credit by certain lenders. That is one side of the story. On the other hand, the lenders are worried about the high default rate and difficulties on foreclosing on the collateral through courts in the case of defaults and special funds. Lenders were also saying that they have serious issues. They have high defaulters and most of their cases are pending in court. They cannot get back their money that they have given or lent to various business enterprises or individuals. With these two views or schools of thought, which are very conflicting, our economy continues to miss out on the huge potential that the micro, small and medium enterprise have been driving the economic growth of our country. In the Ease of Doing Business Report, which is produced annually by the World Bank, Kenya continues to get a poor rating in as far as the Getting Credit Indicator is concerned. This scares away both foreign and local investors. Among the reasons cited for this poor ranking in terms of the Getting Credit Indicator was lack of a secured transaction framework, lack of an electronic notice-based collateral registry available both to the incorporated and unincorporated entities and adequate protection of lenders in case of borrowers insolvency. This Bill is trying to create a register of both incorporated and unincorporated entities and an electronic notice where lenders and financial institutions can look at. As a solution to this, a technical committee comprising of the National Treasury, the Central Bank of Kenya (CBK), the Office of the Attorney-General, the Department of Justice and the Kenya Bankers Association (KBA) was established in 2014 to look at and explore ways of increasing private sector credit and access of credit to the private sector. One key recommendation by this committee was to overhaul the law for collateralisation of movable securities and establish a collateral registry for movable property. It takes months for you to charge property in our country and to charge, either land or movable or non-movable property. This committee felt that there must be an electronic collateral registry for all movable property in our country. This was informed by the fact that micro, small and medium enterprises lack fixed assets such as land or buildings to offer as collateral. We are talking about people who are engaging in business in Eastleigh, Gikomba and many of our small malls or wholesaling. Those people lack fixed assets such as land or buildings as collateral entities to use for borrowing. As movable property, they have goods in their shops and other items which are movable which are considered as risk collateral by most financial institutions and lenders. Lenders say you might have goods worth Kshs20 million, but the bank will not allow you to borrow using those movable assets in your shop because they say that, that is risk collateral when it comes to the lender. The Movable Property Security Rights Bill will create ease of doing business and focus on the use of movable assets as collateral. The Bill is trying to change the narrative that for you to access credit, you do not just need only land or any fixed asset, but you can use the goods, services and movable assets that you have, for example, my camels. I own about 400 to 500 head of camel. There are people who own 1,000 cows. They can use that as a movable asset. You can also use the goods you have in your shop. We have so many young Kenyans in Luthuli Avenue who engage in the electronics business and they have goods worth Kshs10 million in their shops. That is what this Bill is trying to establish. It will establish the Office of the Registrar of Security of Rights. So, there will be an office to deal with these securities. It will promote consistency and certainty in secured financing related to moveable assets. It will enhance ability of individuals and entities to access credit using moveable assets and will establish a registry to facilitate the The electronic version of the Official Hansard Report is for information purposesonly. A certified version of this Report can be obtained from the Hansard Editor."
}