Why more Kenyans are using their TVs, furniture over cars to secure loans

Over four financial years, Kenyans have used household items to secure credit over motor vehicles.

This as the Business Registration Service (BRS) reports that from the 2021/2022 Financial Year, Kenyans have preferred movable collateral to secure low-value loans.

Within the cited period, BRS said that 291,099 Kenyans preferred household items as collateral compared to 243,280 who preferred motor vehicles.

Another 177,778 have opted to use furniture as collateral and 85,416 have used livestock.

Some other items being used as collateral include stock trade shares, bank accounts, intellectual property, crops and document titles.

These numbers shed light on the crippling economic sector as Kenyans prefer to risk items that can be easily auctioned by creditors in the case of defaults.

These household items include electronic devices and appliances.

Borrowers have room to use the aforementioned items courtesy of the Movable Property Security Rights Act (MPSR), 2017, which was designed to simplify the use of movable assets as collateral.

Amid high demand for loans, it helped define hire purchase agreements to include transactions financed by sellers or third parties.

BRS is a State Corporation established to administer policies, laws and other matters relating to the registration of companies, partnerships and firms.

It focuses on providing quality business support services that are responsive to its customers throughout their operations.