Concerns as Banks Reject Title Deeds as Security for Loans

  • Most financial institutions are reportedly rejecting title deeds as security before giving out credit to Kenyans.

    Before the change of heart, banks used land as collateral to guarantee the money borrowed. The value is typically equivalent to the amount offered.

    Land use as collateral was widely accepted since most banks were assured that they could not lose money if the borrower defaulted as they could claim the assets through foreclosure or repossession.

    However, increased land fraud cases necessitated commercial institutions to change policies. 

    Different plants in a home garden during the beautification programme

    Different plants in a home garden during the beautification programme.

    Green Valley

    Speaking to Kenyans.co.ke, advocate Nyokabi Ndung’u claimed that some officials in the Ministry of Lands enter into dubious deals with clients who generate fake end title deeds.

    According to Nyokabi, fake title deeds are even included on the land registry, making it difficult for banks to verify their authenticity.

    “Some land officials collaborate with brokers, and they decide to make fake end title deeds that just exist for a small period to dupe the banks,” Nyokabi stated.

    Bernard Wanjohi, a land surveyor, argued that some maps are outdated and officials sent by banks get compromised during the confirmation process.

    “Sometimes maps are not updated, and some people inscribe fictional maps of land they intend to sell on such maps.

    “People sent by lending institutions to conduct a search at the registry might encounter compromised officials who have been paid by land sellers,” Wanjohi indicated.

    Brokers seeking to acquire credit from banks to buy cars, facilitate constructions or invest in various businesses also work with government officials to acquire counterfeit title deeds to dupe banks who lose their money.

    According to Nyokabi, land price fluctuations, especially in Nairobi, caused by economic shifts and inflation, have complicated the disposal process.

    “The current economic shift is making it quite difficult to dispose of the land even when people fail to repay their loans. What will the bank do with the land if they cannot dispose it at a profit,” she asked.

    Additionally, the tedious process involved in doing land searches and making verifications has also affected the process of acquiring credit.

    A block of apartments in Nairobi, Kenya.

    A block of apartments in Nairobi, Kenya.


    Other factors, such as land disputes and policies, have made it difficult for banks to accept the property as security.

    However, banks have adopted automation and even increased due diligence to avoid being duped. This has sealed the loopholes in the sector.

    Also, the government has reduced cases of fraud by digitising the land registers and introducing the Ardhisasa online platform.

Jay Ndungu

Jay is a computer scientist and journalist with a passion for the intersection of technology and society. He has a background in computer science, developing a deep understanding of the technical aspects of the industry, including programming languages and software development methodologies. Currently, He writes for Nairobi Times, covering a wide range of topics including technology, politics, sports, and entertainment. With his unique combination of technical knowledge and journalistic experience, Jay brings a unique perspective to the stories he covers, able to explain complex technical concepts in an easy-to-understand manner. His work is dedicated to bridge the gap between technology and society, and to make people more aware of the potential of technology to make the world a better place.

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