Phantom fortunes: Kenya’s grand illusion of turning intellectual gold into bankable dust
The Mt Kenya Times 
By Jerameel Kevins Owuor Odhiambo
In 2017, Kenya enacted the Movable Property Security Rights Act, a statute that theoretically unlocked intellectual property patents, trademarks, copyrights, industrial designs as collateral for credit. Eight years later, during the 2023/24 financial year, intellectual property accounted for less than one percent of all movable collateral registered at the Business Registration Service. Less than three percent of security interests involved any intangible assets at all. This is not a minor administrative lag. It is a national failure dressed in progressive language, a legislative promise that has collapsed into statistical irrelevance while innovators, artists, and small enterprises remain starved of capital.
The numbers do not merely disappoint; they indict. Kenya’s creative economy contributes tens of billions of shillings, yet artists still beg for financing because their songs, scripts, and brands cannot be converted into loans. Small enterprises face a 59 percent loan rejection rate for lack of “acceptable” collateral land, vehicles, fixed assets that the colonial and post-independence imagination still privileges as real. Meanwhile, counterfeiting and piracy bleed the economy of an estimated KSh 100 billion annually. The very assets meant to be securitized are being looted in plain sight, and the financial system shrugs.
History sharpens the irony. Kenya’s property regime was forged in the furnace of land alienation. From the Crown Lands Ordinance to the post-independence fixation on title deeds, value has always been measured in acres and brick. Intellectual property was an afterthought, an exotic European import to be registered, not leveraged. The MPSRA arrived like a belated apology, acknowledging that knowledge itself can be wealth. Nevertheless, the old theology persists. Banks continue to treat patents as ethereal and copyrights as unverifiable, preferring the solid comfort of a title deed that can be auctioned on the courthouse steps. Eighty-five percent of banks still classify intangible assets as high-risk. Only a quarter of Tier 1 banks even partially accept them. The law opened a door; the gatekeepers simply refused to walk through it.
This is not caution. It is intellectual cowardice. Valuation remains an underdeveloped craft because few practitioners exist and no standardized methodology has been imposed. There is no liquid secondary market for distressed IP. Parallel registries KIPI, KECOBO, and the Collateral Registry create legal fog instead of clarity. When a creator defaults, the creditor faces an enforcement maze rather than a clean realization path. The result is predictable: capital remains trapped in the hands of those who already own land, while the young software developer in Nairobi, the agro-tech innovator in Eldoret, and the musician whose track streams across the continent are told their genius is not bankable.
Consider the contrast. In 2022, Chinese banks extended the equivalent of roughly USD 68 billion in loans secured by patents and trademarks, reaching at least 18,000 businesses. David Bowie once raised USD 55 million against future royalties from his catalogue. Dunkin’ and Domino’s have financed billions on brand equity. Kenya watches these developments with academic interest while its own registries collect dust. The correlation is brutal: nations that convert intellectual property into capital accelerate; those that treat it as decorative paperwork stagnate. Kenya’s knowledge economy is not failing because Kenyans lack ideas. It is failing because the financial architecture still worships the tangible and distrusts the intangible.
The human cost is visceral. A fashion designer whose trademarked patterns define a generation cannot expand because the bank demands a plot in Kiambu. A fintech founder with proprietary code walks away empty-handed while counterfeit versions of foreign software flood the market. An author whose books shape national discourse cannot borrow against future royalties. These are not isolated misfortunes. They are systemic amputations of potential. Every rejected IP-backed application is a quiet vote for continued dependence on physical assets and foreign capital. Every year of inertia is another cohort of talent that either emigrates or abandons the risky path of creation for safer, land-secured mediocrity.
The satire writes itself. We have crafted an elegant legal instrument that allows the use of invisible assets, then surrounded it with practical obstacles so dense that the instrument becomes ornamental. We celebrate “innovation hubs” and “creative economies” in glossy policy documents while the collateral registry treats IP as a statistical curiosity. We preach financial inclusion yet maintain a collateral hierarchy that systematically excludes the knowledge workers who will determine whether Kenya becomes a producer or remains a consumer of the digital age. The emperor’s new collateral is not merely invisible; it is deliberately kept that way by institutional inertia.
This cannot continue. Categorical action is required from every actor who has allowed the mirage to persist.
The National Treasury and Central Bank must issue binding guidance that reduces capital-adequacy penalties for well-structured IP-backed lending and creates regulatory sandboxes for IP finance products. Parliament must end the multiplicity of regimes by integrating IP registries with the Collateral Registry and legislating clear, rapid enforcement remedies specific to intangible assets. KIPI, KECOBO, and the Business Registration Service must stop operating in silos; they must build a unified digital platform that allows simultaneous registration of ownership and security interests, and they must fund public campaigns that teach creators how to package their assets for finance.
Commercial banks can no longer hide behind risk narratives. They must train credit officers in IP valuation, partner with specialized valuers, and pilot products particularly for the creative sector and agritech where cash-flow from royalties or licensing is predictable. Development finance institutions and the Kenya Development Corporation should underwrite first-loss facilities to de-risk early transactions and demonstrate viability. Universities and professional bodies must produce a cadre of IP valuers; the current shortage is both a market failure and a policy scandal.
Creators themselves must register their rights aggressively and demand that collective management organizations improve transparency in royalty collection so that future income streams become credible security. Civil society and industry associations must name and shame institutions that continue to reject IP collateral without serious appraisal. The judiciary must designate specialized commercial benches competent to handle the unique remedies required when intangible security is enforced.
The alternative is continued hemorrhage. Kenya cannot build a knowledge economy while treating its primary assets as phantoms. The MPSRA was never meant to be a decorative statute. It was meant to democratize capital by recognizing that the mind’s products can be as solid as soil. Until banks, regulators, and policymakers treat that recognition as operational rather than aspirational, the grand illusion will persist: a country rich in ideas, poor in the means to capitalize them, congratulating itself on progressive laws while the statistics expose the hollowness of the claim.
The gold is there. The question is whether Kenya has the institutional courage to stop pretending it is dust.
The writer is a social commentator.
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