Uganda: New Law to Allow Movable Assets as Collateral
Access to affordable credit is one of the biggest challenges Uganda is facing, which if not addressed, could hinder the country from attaining a middle status target by 2020. Experts say only 20 per cent of Ugandans own land titles which are majorly used as collateral and the 80 per cent of population have been excluded from accessing credit because they do not own titles. Yet this larger group of Ugandans is running small businesses and own movable assets which is capital locked up and can be used as security.
To address this challenge, a new act titled 'Movable Property Security Interest Act 2017' will see Uganda Registration Services Bureau (URSB) working with Financial Sector Deepening Uganda (Fsd Uganda), Bank of Uganda and local banks set up a formal movable collateral securities registry. Opening a validation meeting on the draft of the 'Movable Property Security Interest Act 2017' at the Golf Course Hotel, Kampala last week, URSB registrar general Bemanya Twebaze, said: "This act once is in place will facilitate credit for small borrowers and manage the risk of borrowing by the financial sector."