By Munene Maina
Sacco members have the alternative of using movable assets as collateral to secure loans.
This is in addition to the traditional use of land and chattel collaterals.
“This will in effect greatly improve the ease with which consumers can access credit facilities from the financial lenders; while at the same time securing the interest of financial service providers such collaterals,” noted SASRA in the latest supervisory report.
Saccos, particularly those whose credit policies demand collateral to secure credit facilities have been urged to get acquainted with the new changes and the accompanying regulations.
This is to enable them to amend their Credit Policies accordingly so that their membership can fully reap from the initiative of the Government.
In 2017 the Government passed the Movable Property Security Rights Act No. 13 of 2017 (MPRSA); as well as promulgated the Movable Property Security Rights (General) Regulations, 2017 – Legal Notice No. 86 of 2017 to operationalise the MPSRA.
The main objective of the MPRSA and the Regulations was to among others facilitate the use of movable property as collateral for credit facilities.
SASRA said Saccos should take interest in the definition of movable assets that include both tangible and intangible asset.
Another key interest for Saccos is the needs to not only register their interests in movable assets in respect of which they have advanced credit against.
Movable assets are physical objects such as production machines, equipment, computers, jewellery, and vehicles among others.
