Movable assets to be used as collateral if new Bill becomes law

Cabinet has approved a Bill that will allow banks and other financial institutions to lend against movable assets as collateral.

The Moveable Property Security Rights Bill, 2016, which was endorsed on Wednesday will provide for the creation of an electronic registry, enhance confidence of the lending institutions and create an enabling environment to lend against moveable assets as collateral.

“The greatest beneficiaries from these key reforms, which will now go to Parliament for debate and enactment, are Micro, Small and Medium Enterprises. It will allow lending to a group that has previously struggled to access credit, and the economy to benefit from the immense potential that MSMEs have in driving economic growth,” a State House brief said.

At the same time, the construction industry got a major boost after Cabinet scrapped all construction-related charges levied by government ministries and counties in a significant move to bolster the sector and foster investment.

During the meeting chaired by President Uhuru Kenyatta, it was agreed that multiple charges levied by various ministries, departments, agencies and county governments for the construction industry had contributed to the increase of costs in the sector, and led to inordinate delays in obtaining requisite approvals, Cabinet said in reaching the decision.

Cabinet’s actions will encourage investors, increase investor confidence and improve the cost of doing business, said the brief.

Cabinet said it had eliminated duplication of roles with a view to ensuring that government ministries and departments performed their core mandate. Overlapping services will now be performed by the ministry, department or agency best suited to offer the requisite service.

Cabinet als decided that all affected legislation and regulations would be amended to bring into effect the scrapped levies.

Further, it approved the creation of a one-stop shop approach, such as that delivered within Huduma Centres, for licensing and registration of contractors by the National Construction Authority.