Pledging Collateral & Asset Security

The Collateral Pledge Flow (/collateral/new or /loans/:hex/pledge) registers physical, legal, or financial assets to secure a loan facility or borrower account.

1. Operational Overview & Access

  • Required Privilege: collateral: create (Loan Officers and Branch Managers).
  • Two Pledging Modes:
    1. Direct Loan Cover (mode="loan"): Collateral is bound to a specific active or pending credit facility (LOX...). Counts directly toward that loan’s required Loan-to-Value (LTV) coverage.
    2. Client Blanket Security (mode="client"): Asset is registered against the borrower profile (CLX...) before an application is made, remaining available in reserve for future credit lines.

2. The 3-Step Pledging Rail

[ Step 1: Behind Whom ] ──► [ Step 2: The Asset ] ──► [ Step 3: Confirm ]

Step 1: Behind Whom (#who)

Select the target liability:

  1. Choose Pledging Target:
    • Toggle Against a Loan (recommended for origination).
    • Toggle Against the Client Alone (for onboarding pre-pledged assets).
  2. Search the Target:
    • Use the live scoped search input (data-act="who.search").
    • Type borrower name, phone, ID, or loan hex (LOX...).
    • Click the matching entity card from the results list.
  3. Review Current Exposure:
    • The system displays the borrower’s total active debt, number of existing open loans, and currently pledged security value.

Step 2: The Asset Details (#asset)

Capture the physical, legal, and valuation parameters of the asset:

Form FieldData TypeValidation & Guidelines
Asset KindSelection TilesChoose from: Vehicle (Logbook), Land (Title Deed), Chattel (Machinery / Electronics), Deposit (Cash Lien).
DescriptionTextDetailed make, model, registration number, color, or parcel number (e.g., “Toyota HiAce KDA 451B, White, 2017”).
Open Market Value (OMV)Currency (KES)The appraised fair market value established by an authorized valuation report.
Registration / Title RefText (Mono)Logbook number, Title Deed number, or chattel serial tag.
Comprehensive Insurance ExpiryDate (YYYY-MM-DD)Mandatory for motor vehicles and commercial equipment.

Step 3: Confirm & Pledge (#confirm)

Review the legal commitments before stamping the database:

  1. Valuation & Haircut Readout:
    • Displays gross appraised Open Market Value (OMV).
    • Applies the system haircut according to asset class ($35%$ for vehicles, $50%$ for chattels).
    • Displays Net Forced Sale Value (FSV) and calculated Loan-to-Value (LTV) percentage.
  2. LTV Compliance Check:
    • If $\text{LTV} \le 75%$, the badge displays <span class="pill ok">Fully Covered</span>.
    • If $\text{LTV} > 75%$, a warning banner alerts that collateral security is deficient.
  3. Commit: Click Pledge Asset.

3. Post-Pledge Operations & Custody

  • Vault Custody: Physical documents (original logbooks, duplicate keys, land title deeds) must be transferred to the branch dual-custody fireproof safe.
  • Lien Perfection: The legal team files chattel registration with the Business Registration Service (BRS) or registers an official joint logbook caveat on the NTSA TIMS portal.
  • Status Lifecycle: Asset transitions to pledged. Once the loan is fully repaid, the manager initiates the Collateral Release action (/collateral/:hex/release).