Are Chattel Mortgages are still in use?

CHATTEL MORTGAGE DEFINED

Under S2 of the Chattels Transfer Act, Chattels are defined as any movable
property that can

be

completely transferred

by delivery,

and

includes

machinery, stock and the natural increase of stock as hereinafter mentioned,

crops and wool.
Chattel mortgage is a legal term used to describe a loan arrangement in which
an item of movable personal property is used as security for the loan. The
movable property, or chattel guarantees the loan in this type of mortgage. This
differs from a conventional mortgage in which the loan is secured by a lien
on real property.1
ARE CHATTEL MORTGAGES STILL IN USE?
This article is written in response to the task by Daniel Makhanu on 18 th August
2016, where he requested us to confirm indeed Chattel Mortgages are still being
used in Kenya. Due to time constrains, I only managed to contact one financial
Institution (UNAITAS) through a friend.The rest of the information was gathered
through the institutions websites.
To answer the counsels question, YES Chattel mortgages are still in use though
in different forms and different rates by different Financial institutions.
The following institutions still offer chattel mortgage services.
1. UNAITAS
A friend from Unaitas confirmed that they offer chattel mortgages through a
schedule called Asset finance schedule. The schedule below sheds more light
on the same.

Unaitas Asset Finance Schedule

Financing options
ASSET TYPE

Private/Saloon Cars
1

ASSET

MEMBER

MAX

CONDITI

TO

REPAYMENT

ON
New

FINANCE
20%

PERIOD
5 yrs

Used*

30%

4 yrs

http://www.investopedia.com/terms/c/chattelmortgage.asp

Commercial

Vehicles

(Prime

movers,

trucks, pickups, Vans)

School Buses
PSV Vehicles (Tour Vans, Taxis, Hires)
PSV Matatu and Buses
Motorbikes
Trailers
Tractors
and

related

New
Used

20 %
30%

4 yrs
4 yrs

New
New
Used
New

15%
30%
35%
40%

4
3
3
3

yrs
yrs
yrs
yrs

45%
25%
30%
30%

2
1
4
4

yrs
yr
yrs
yrs

Used
New
New
agricultural New/Use

implements
Office Equipments (Computers, Printers,

d
New

40%

3 yrs

Servers,)
Industrial

New/Use

40%

4 yrs

Machinery)
Contractor Equipment/ Earth Movers

d
New

30%

4 yrs

Used
New

35%
40%

3 yrs

Specialized Equipments Medical, Lab

Used

50%
50%

Equipment

(Plant

and

REQUIREMENTS
1. Individuals
a. Fill loan application form
b. Copy of ID
c. Copy of PIN Certificate
2. Limited Liability Company
a. Fill loan application form
b. Certificate of Incorporation
c. MoA and AoA
d. Copies of ID & PIN Certificate of all directors
e. Copy of company PIN Certificate
Supporting Documents:
1. Sales agreement
2. Log book
3. Latest 3 month payslips
4. Contracts
5. Letter from employer

Other features:
Insurance premiums arranged
Quick fix available in case of need
Partner with Motor Vehicle Company,
2.KCB
KCB also offer chattel mortgages. They have a product called Dairy Installment
loans.From their website they describe it as follows;
Dairy instalment loans: This product targets those involved in the Dairy
value chain from the farmer, milk vendor, dairy bulkers, milk products
transporters, milk chilling equipment, transport equipment, Motor cycles,
pickups, trucks and all other dairy value addition equipment. Features.
Duration 36months. Minimum loan amount 50,000 Security- chattels
mortgage

over

equipment,

joint

registration

Competitive Interest Rates.

Other institutions that offer Chattels Mortgages include:

Equity bank

Co-operative bank

Family Bank

NIC bank

CONCLUSION
Chattel mortgage is still in use in Kenya.

of

Motor

vehicle.