The chattels security bill 2009 being debated in parliament, will if passed into law, grant Ugandans the ability to access loans using household property. Banks usually accept only landtitles as collateral for accessing loans.
The bill contains items such as television sets, refrigerators, crops, animals, wool, stock and natural increase of stock, tree logs and extracted minerals to be used as security to access credit facilities.
Animals and items put forward as security will then be branded and proper identification including sex, age, colour, of stock done.
Tricky part is with crops. The crops shall be sold after 20 days when borrower fails to repay the loan. Crops that do not mature within a year from date of signing agreement will not be used as security.
This arrangement has existed for several years and has worked wonderfully for private lenders rather than banking institutions. As long as you own any item of value (car logbook, computer, post dated cheque), you easily have any amount of money within minutes.
It is surely a noble action to get more people to access loans. Maybe this is the last step towards realizing the president’s bonnabagagawale scheme!
