Kenyans are now securing loans using fridges, TVs, livestock, the latest data from the Business Registration Service (BRS) has shown. The BRS is currently the custodian of the Movable Property Security Rights registry in which creditors including commercial banks list their rights over goods that borrowers have used as collateral.
According to the data, household items including fridges and televisions are now the most commonly used form of collateral. These items have surpassed motor vehicles.
The data shows that from July 2021, 291,099 household items have been used to secure loans in comparison to 243,280 motor vehicles that have been used on loans over the same period.
This is the continuation of a trend that was seen in 2024 when household items including televisions, sofa sets, tables and fridges and livestock such as cows made the list of items that were used to get loans. In 2024, over 100,000 household items have been given up by Kenyans as collateral for loans.
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According to the BRS, household items top the list since they are most preferred by creditors due to their accessibility and high market demand in case of default and auctioning.
They are the followed by cars, furniture, equipment, and livestock. In the latest data, 117,778 pieces of furniture and 85,416 cattle were used to secure loans. Equipment also made the list with 79,179 listed as collateral.
According to Shigadi Mwakio, the Deputy Registrar of the Movable Property Security Rights registry, the rise in the number of movable assets being used as collateral for loans coincides with the leeway that lenders have given borrowers.
“Lenders do not have a problem with accepting household items as collateral because there are usually available receipts on big-ticket items such as fridges and televisions sets. These items are movable and the lenders know where they can find them,” Mwakio told local media.
Nevertheless, the uptick of varying types of collateral comes at a time when the number of Kenyans defaulting on loans has increased. For instance, data from the Central Bank of Kenya shows that as at the end of December 2024, non-performing loans had reached 16.4 percent of all loans.
