The Movable Property Security Rights Act and the Legitimisation of Moneylenders by Implication

Abstract

This paper explores the legal standing of moneylenders in Kenya. The paper argues that although the Movable Property Security Rights Act, 2017 has impliedly legitimised moneylenders in Kenya, it has, nevertheless failed to provide a regulatory framework thereof because it does not make provision for supervision of their business yet it allows them to enforce their debts under it. The study traced the origins of moneylenders to ancient civilisations of Rome and Greece. Their development through time was examined with a view to contextualising the current trends. The practice of moneylending business in various societies across the globe, and the corresponding legal regimes were analysed. These included jurisdictions in Europe, America, Asia as well as Africa. A comparative study was done. Legal regimes in jurisdictions that were considered developed with regards to regulation of moneylenders were comprehensively discussed. The study indicates that moneylending business is as old as history itself. The practice has consistently existed throughout time. The disapproval of moneylenders by societies has also been a constant factor since time immemorial, moreso in earlier times than later on in history. The contempt against moneylenders eased with time. In more recent times, they are seen as a necessary evil that needs to be regulated. Kenya’s moneylending history can be traced back to pre-colonial periods. A law existed to regulate moneylenders until 1984 when it was repealed leaving moneylenders to operate in the shadows of the law. This rendered borrowers vulnerable to exploitation by moneylenders. The Movable Property Security Rights Act, 2017, in a way legitimised the business of moneylenders, giving them rights to formally secure their debts, acquire priority right, and enforcement thereof among other rights. Nevertheless, it failed to provide a framework for their regulation.