The enactment of the Movable Property Security Rights Act, 2017 (the MPSR Act) marked a significant shift in Kenya’s secured lending landscape by recognising movable assets as viable collateral. The Act established a legal framework for the creation, perfection and enforcement of security interests over movable property and introduced the Movable Property Security Rights Registry (the MPSR Registry), an electronic notice-based collateral registry administered by the Business Registration Service (BRS).
Prior to the introduction of the MPSR regime, access to credit was largely dependent on the availability of traditional forms of security, particularly land. This often limited financing opportunities for businesses that possessed valuable operational assets but lacked real estate holdings. The MPSR Act sought to address this gap by enabling borrowers to leverage movable assets such as machinery, motor vehicles, inventory, accounts receivable, agricultural assets, equipment and intellectual property as collateral for financing.
The MPSR Registry lies at the centre of this framework. Unlike traditional registries that record ownership of assets, the Registry operates as a notice-based system through which lenders register notices of their security interests. Registration does not transfer ownership of the asset to the lender; rather, it creates a publicly searchable record that the asset has been charged as security. This promotes transparency in secured transactions, assists lenders in assessing existing encumbrances and plays a critical role in determining priority between competing security interests.
In practice, a security right is typically created through a security agreement between a borrower and a lender, following which a notice is registered in the MPSR Registry. The ability to conduct searches against registered security interests has enhanced due diligence processes and strengthened confidence in asset-based lending by reducing the risk of undisclosed or competing claims over collateral.
Beyond facilitating access to credit, the MPSR regime has contributed to the development of a more inclusive financing environment, particularly for small and medium-sized enterprises whose most valuable assets are often movable rather than immovable. For lenders, the regime provides greater certainty and enforceability. For borrowers, it unlocks the economic value of assets that may previously have had limited utility in securing financing.
The recent rollout of BRS Version II represents a further step in the modernisation of Kenya’s business registration infrastructure. The upgraded platform is intended to streamline registration processes, improve accessibility through the eCitizen platform and enhance the overall user experience across the various registries administered by the BRS. While much of the attention surrounding the transition has focused on company registration services, the improvements are equally significant for users of the MPSR Registry, whose effectiveness depends on an efficient, reliable and accessible registration system.
As secured transactions continue to evolve, the MPSR regime remains one of the most important developments in Kenya’s commercial and financing framework. The continued enhancement of the Registry through BRS Version II is expected to strengthen the integrity of the registration system, facilitate more efficient lending transactions and reinforce the growing role of movable assets as a source of collateral in Kenya’s modern economy.
