Tanzania’s Parliament has passed the Secured Transactions (Movable Property) Bill, 2026, introducing a legal framework that will allow individuals and businesses to use a wider range of movable assets to secure loans.
The Bill defines the rights of lenders and borrowers in movable-asset financing and establishes a Collateral Registry within the Bank of Tanzania (BoT) for recording security interests.
The legislation also sets rules for checking whether assets have already been pledged, determining competing claims, enforcing security interests after default and allowing borrowers to redeem collateral before disposal.
Here is what the passage of the Secured Transactions (Movable Property) Bill means for Tanzania’s credit market.
Borrowers Can Use More Movable Assets to Secure Loans
One of the main changes under the Secured Transactions Bill is the expansion of the types of assets that can be used as loan collateral. The framework covers tangible and intangible movable property, giving borrowers an alternative to relying on land and buildings when seeking financing.
The Bill also covers proceeds generated from pledged property through sales, collections, leasing, licensing and insurance compensation. This means the legal framework for secured lending will extend beyond the original movable asset to certain proceeds generated from that property.
Lenders Will Have a System to Check Existing Claims
The Secured Transactions Bill establishes a Collateral Registry under the Bank of Tanzania to record security interests in movable property. The registry will allow public searches for a prescribed fee. For lenders, this provides a mechanism for checking whether an asset has already been pledged as collateral before extending financing.
The provision addresses the problem of the same asset being used to secure multiple loans without other lenders knowing about existing claims. Under the Bill, competing claims will generally be determined according to the order in which security interests are registered.
The Bill Defines What Happens When a Borrower Defaults
The new framework also establishes procedures for lenders to enforce security interests when borrowers fail to meet their obligations.
Where a borrower has agreed to surrender the collateral, a lender can seize and dispose of the asset after default without obtaining judicial approval. Where the borrower has not agreed to surrender the asset, a court order would be required. The lender would also generally be required to provide at least 14 days’ notice before disposing of the collateral.
Borrowers Can Redeem Collateral before Disposal
The Secured Transactions Bill provides borrowers with an opportunity to recover pledged assets before they are disposed of. A borrower can redeem the collateral by settling the secured obligations together with reasonable enforcement costs before disposal takes place.
This establishes a defined process for borrowers who want to settle their obligations and recover assets following a default.
The Law Addresses Multiple Pledging Of the Same Asset
The passage of the Secured Transactions Bill also creates rules for dealing with situations where the same movable asset is pledged to more than one lender. The Collateral Registry will record security interests and provide a mechanism for lenders to conduct searches.
Priority between competing claims will largely depend on the order of registration. The framework is intended to address the lack of information among lenders when borrowers pledge the same collateral for multiple loans, an issue that has contributed to non-performing loans.
Bank of Tanzania Will Have a Key Role
The Bank of Tanzania will be responsible for the Collateral Registry established under the Secured Transactions Bill. Parliament’s Budget Committee also urged the central bank to enforce the framework, including revoking licences of lenders that use unregistered collateral.
The committee further called for accessible procedures that allow lenders and other relevant parties to verify ownership of assets. These measures will form part of the administration of movable-asset financing under the new framework.
What the Bill Means for Small Businesses and Other Borrowers
For businesses and individuals that do not use land or buildings as loan security, the legislation creates a legal framework for financing against movable property. Eligible assets can include property such as machinery, inventory and livestock, as well as other tangible and intangible movable assets covered by the law.
The framework therefore changes how movable property can be used in secured credit transactions by establishing rules for registration, priority, enforcement and redemption.
What the Bill Means for Lenders
For lenders, the legislation provides a formal system for registering security interests and checking existing claims over movable assets. The ability to search the Collateral Registry can provide information on whether an asset has already been pledged, while registration order will generally determine priority among competing claims.
The Bill also establishes procedures for recovering and disposing of collateral after default, including circumstances where court approval is required and where it is not.