DEBT RECOVERY -vis-à-vis- DATA PROTECTION Part 1C
March 20, 2025REDRESS & RECOURSE TO THE DIGITAL LENDING COMPANIES AS DATA PROCESSROR OR THE DATA CONTROLLER
Author
Joy Ruguru Kabuchoru
The digital lending company as a business entity has to make its losses or profits. In need to
curb the making of losses, they aggressively recover their debts as evident in the legal insight
1a and 1b. This behavior is facilitated by factors such as:-
- lack of adequate securities, and/or
- insufficient financial information of the borrower.
The Kenyan jurisprudence has enacted law(s) with the aim to protect the digital lending companies with reference to the lack of adequate securities. The law that we will focus on today is the Moveable Property Security Right Act, 2017 as the substantive law and the Moveable Property Security Right Regulations, 2018 as the procedural law. The Moveable Property Security Right Act, 2017 seeks to give protection and security to lenders in that by virtue of tis statute, they can advance loans using moveable(s) Moveable Property Security Right Act, 2017
as collaterals.
The Act:
- gives certainty and consistency to lenders as it assures them that they can advance loans using movables a collateral;
- enhances the ability of individuals especially the Small Market Enterprises to secure loans using moveable(s) as collaterals; and
Noting keenly, the collaterals can take the form of tangible of intangible moveable collaterals. The Moveable Property Security Right Act, 2017 envisages on the:
- creation of a security right; this security right is created by a security agreement from which the normal rules of contract do apply.
- registration of a security right; and for the security agreement to have a legal effect, it has to be registered. Rember, one can only register what he/she owns
- enforcement of a security right; which only comes in when the grantor is in default.
The remedies available to the lending companies are:
- Institution of debt recovery proceedings
This can only be instituted by the secured creditor. On matters jurisdiction, if the value if the claim does not exceed Kenya Shillings one million, then the claim is filed in the small claims court. The institution of debt recovery proceedings can take the form of either as a stand-alone remedy or exercise another remedy such as the sale of proceeds.
- Lease the collateral which goes hand in hand with the appointment of a receiver
- Appointment of a receiver
- Take possession
- Creditor’s power of sale
Thus, if found in such predicament and you wish to pursue a legal claim. Don’t look any further,
you are in the right hands, just contact us.
