CBK to create collateral registry

CBK to create collateral registry

Banks will soon implement the collateral registry to ease transactions between banks and their customers.

Central Bank of Kenya (CBK) Deputy Governor Sheila M’Mbijjewe said the central database will record all registrations of charges or collateral created by borrowers to secure credits provided by lenders.

According to the CBK, the data will help the banks and their clients transact without necessarily involving other parties including a lawyer which in time saves time and money.

The main object of the new system will be to register charges and collateral created by borrowers on both movable and immovable properties to secure credit facilities provided by lenders.

Kenya Bankers Association Chief Executive Officer Habil Olaka said the move would bring efficiency and that banks will not need to charge fresh security every time there is any transaction with its clients.

Mr Olaka added that the registry provides information on the existence of relationships between lenders and borrowers as they relate particularly to movable and immovable collateral as well as other ancillary functions

“An avenue has also been created to enable searches to be conducted on the database of the registry to ascertain if there are prior security interests in the properties pledged by the borrowers for credit,” he said.

Some of the benefits for the new secured lending regime gives SME’s the opportunity to use their movable assets as collateral to access finance for growth.

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CBK KBA collateral registry heila M’Mbijjewe

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