Banking and Finance

A lender commonly takes a charge over land under the Land Act 2012, a debenture over a company's assets, a chattels mortgage over movable property under the Movable Property Security Rights Act 2017, a pledge of shares, an assignment of receivables or insurance and personal or corporate guarantees. Each is registered in a different place and each fails if the registration is missed.

A charge created by a company must be registered with the Registrar of Companies within 30 days of creation, failing which it is void against a liquidator, an administrator and other creditors, and the debt becomes immediately payable. Charges over land are also registered at the lands registry, and movable property security is registered on the collateral registry. We diarise all three.

An application to the Central Bank of Kenya under the Banking Act with the proposed shareholders, directors and senior management, the business plan, the capital and evidence of systems and controls, followed by the Bank's fit and proper vetting and an approval in principle before the licence issues. Minimum core capital is rising in stages to KES 10 billion by 2029, which shapes every application.

Yes. A foreign lender does not need a Kenyan banking licence to make a loan to a Kenyan borrower, though it must consider withholding tax on interest, exchange control reporting, stamp duty on security documents and the enforceability of foreign law and foreign judgments in Kenya. We act for foreign lenders on all of these and give the local law opinion the facility requires.

The lender serves the statutory notices, which for land under the Land Act require a notice of at least 90 days followed by a 40 day notice of sale, then exercises its remedies, whether sale, receivership under a debenture or suit. Borrowers have real defences where notices are defective or valuations unfair, and we act for both sides.