The Cabinet has approved a Bill that would allow borrowers to use household goods like fridges and cookers to secure commercial bank loans in a move that widens the bracket of those able to access debt from commercial lenders. Goods listed in the electronic registry will have a unique identification number that will allow tracking of those that have been used to secure bank loans or collateral. This means ownership of a collateral could easily be transferred without the bank’s knowledge, leaving it exposed in case of a default. Should the Bill become law, it will also allow borrowers to use a single asset to get credit from different lenders. Borrowers, who currently use motor vehicles as security, for instance, have to transfer ownership of the car to the bank and deposit the logbook, which is evidence of ownership, with the lender.

Source: Daily Nation November 22, 2016 18:56 UTC