CBK and banks building electronic collateral registry so borrowers can switch loans cheaply

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The Central Bank of Kenya (CBK) and the Kenya Bankers Association (KBA) are developing an electronic collateral registry that Kenya’s borrowers could use to move secured loans from one bank to another with far lower legal and administrative costs. CBK Governor Kamau Thugge told the National Assembly’s Finance and Planning Committee this week that the system would make moving collateral “almost costless”, TechTrendsKE reported on October 31, 2026.

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What the electronic collateral registry would do

When you take a secured loan, such as a mortgage, asset finance or a business loan backed by a title deed or logbook, the bank registers a charge over that asset. To move the loan to a cheaper lender, the charge must be discharged by the old bank and re-registered by the new one. Today that usually means lawyers on both sides, valuations, searches and registration fees, plus weeks of paperwork.

Thugge said the new system would let a borrower who finds better terms at a competing bank move the collateral without engaging several lawyers. “If you have that electronic collateral registry, it becomes very easy for you to be able to move your collateral from one bank to another bank,” he told MPs.

CBK has not yet given a launch date, the legal changes needed, or which types of collateral the registry will cover first.

Why CBK wants easier switching

The plan is tied to the risk-based credit pricing framework, under which banks price each loan according to the borrower’s risk profile. Two customers can therefore pay different rates for the same product. Thugge argued that borrowers who think their bank has assessed their risk wrongly should be able to go to another lender without heavy switching costs, and that this competition is the way to bring lending rates down sustainably.

Switching costs matter. If moving a KSh5 million mortgage costs tens of thousands of shillings in legal fees and stamp duty, a lower rate elsewhere may not be worth it. Removing those costs would make banks compete harder to keep existing customers, not just to win new ones.

How it fits with today’s rates

The Central Bank Rate is 8.75% after the Monetary Policy Committee held it on October 7, while inflation rose to 7.3% in October. KCB’s treasurer recently warned that fuel prices and El Niño rains are the main risks to growth; read our report on KCB’s economic outlook. CBK has also been tightening oversight of banks; see CBK summons two banks over core capital.

What borrowers can do now

• Compare offers: ask competing banks for a written quote including the interest rate, fees and the total cost of credit.
• Ask your bank to match: a competing offer is often enough to get a better rate without moving.
• Count switching costs: legal fees, valuation, discharge and registration fees and any early repayment charge.
• Sacco members: many saccos and banks already offer loan buy-offs. Our guide to sacco loan buy-off explains how it works and what it costs.

Existing registries

Kenya already has a Collateral Registry for movable assets such as vehicles, equipment and stock, set up under the Movable Property Security Rights Act, 2017 and run by the Business Registration Service. Land charges are registered through the Ministry of Lands, increasingly on Ardhisasa. The new system described by Thugge is aimed at making it simple to transfer security between lenders, the step that most often discourages switching.

FAQ

What is the electronic collateral registry in Kenya?

A system being developed by CBK and the Kenya Bankers Association to let borrowers transfer the security on a loan from one bank to another cheaply and quickly.

When will the collateral registry start?

No date has been announced. The Governor described it as under development in October 2026.

Can I move my loan to another bank today?

Yes, through a loan buy-off or refinancing, but you will usually pay legal, valuation and registration costs.

Updated October 31, 2026.

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