Why Are Banks Shying from Offering Moratoriums on Loans?

-

In normal times, the government would be looking for avenues to tax us to death to fund the new financial year budget which will be unveiled later in June. It seems that the outbreak of new coronavirus disease (Covid-19) will make it hard to milk extra taxes from the overburdened citizenry given the slump of business activities as companies have downsized or closed shop altogether.

  And given we’re not in ‘normal times’ with this outbreak affecting almost all sectors of the economy, it is succinct to say there is less cash flow in the economy. And as such, it is a struggle for many, especially for those living from hand to mouth, to put food on the table.

  So grave is the situation that were the government to impose a lockdown to control the spread of Covid-19 pandemic, the move would be unpopular as it would ignite unrest in the country. How do you lock majority with no means of sustenance in their houses where they will no doubt starve to death?

  None other than the President of the Republic appealed to financial institution to go slow on those defaulting on loans, and reconsider those who were earlier listed with credit reference bureaus for consideration for loan facilities to help tide through hard times. Corporate greed would have made many of financial institutions winch, for their bottom line is squeezing extra coins from hard pressed Kenyans in name of making super profits from their high interest loan products!

  A day after the presidential pronouncement, I engaged the Kenya Commercial Bank (KCB) asking for a moratorium on a pending loan, and their answer was the loan facility, disbursed through the mobile lending app, was not covered by the presidential directive. Same observed with Equity Bank, my bank of choice, which, other than making me fill an online form, didn’t bother to extend on same.

  In essence, these lenders inferred the loans covered were those taken through physical visits to their respective banks. Which raises a curious question, what are those mobile based loans quantified as?

  Today I had the audacity to engage KCB again for a moratorium review as I work my ass up to financial stability – this work at home rule is a millstone on the neck if you ask me – and repay them to the last coin. Unfortunately, their offer is a rollover for a month but with an extra 1% added cost! Maybe I’ll be sweating gold nuggets that will be easily converted into cash for the extra interest rate saddled on principal and earlier interest!

  Going by the way these mobile based lenders goes for one in recovering that coin advanced, it is evident even if an epidemic was to decimate the population of the country overnight, they’ll still go to the graves of the defaulter armed with court orders to exhume the remains and demand their pound of fresh!

  Is a three months moratorium a tall order? For the institutions that declare profits in region of billions of shillings each financial year, maybe it is.

  It is nostalgic of how, during the Mwai Kibaki’s administration, most of our financial institutions were pitching tents in the streets hawking credit facilities to entice customers, compared to today when they’re worse than shylocks with interest rates in the stratospheres where borrowers are repaying almost double on the principal advanced!

  And by the way, I have not a so good run-in with the KCB in the past that saw other creditors shunning my applications for credit facilities as my name was then listed. See here: https://paulkariuki.blogspot.com/2017/04/get-yourself-financial-stress-with-kcb.html

Comments

Post a Comment

Popular posts from this blog

Hustling in Porridge Business to Pay Own College Fee

-
Image
    There is this misconception that to be successful in life, one needs to begin big. Successful brand names minting millions in profits did not start big, however. Zipporah Njoki, also known as Nzijo, is an early twenties young woman who goes out of her way to get whatever she wants in life, as nothing comes on a silver platter. For many with no business acumen, Sh200, an equivalent of two US dollars, is not much in terms of seed capital to begin a sustainable business, but not for the young lady who hails from a tough background of Mai Mahiu in Nakuru County. The first of four siblings shares her story here.   " I went into employment shortly after my high school in December of 2017. I have been in and out of several jobs and have worked in a car wash, as a waitress in a hotel, a kitchen cleaner and as a cashier at a wines and spirits shop. However, I can say I began working while in high school. When I was in Form Two, my father was unable to pay for my sch...
Read more

The suave con who charmed his way to our pockets

-
Image
  His name was Muraya. That’s what the man introduced himself the morning he came up the winding path to my home. He was in white gumboots, a white lab coat and an equally matching white cap. He carried a cardboard with papers attached by a clip with a businesslike countenance.   My first impression of him was that he was a veterinary doctor. I’ve not heard of a major livestock disease outbreak or an ongoing vaccination. The least I expected to hear was quarantine the moment he opened his mouth.   Not so. He said he had come from Nyeri and represented Nguku Nene Poultry Farm. He spoke with ease of a seasoned salesperson and it appeared that this was his forte.   There was no doubt that he was a persuasive speaker. It took him less to make me ‘see’ and buy into his plan. Already, according to the list he showed me, some of my counterparts were for the idea. It was this simple. With Sh3, 000, Nguku Nene Poultry Farm would supply some farmers in my village...
Read more

United Methodist Mission Schools – The Untold Story

-
Image
United Methodist Mission Schools   It seems that men and women of cloth greed for wealth has gone overboard. Whereas their duped congregations are content to lead miserable lives waiting for kingdom come and enjoy eternity in total bliss, the men and women of collar are literally swimming in unimaginable wealth right here on paradise earth. Wh ich minister of gospel would choose to wallow in poverty when gullible masses can be exploited to fund their opulent lives?   Witness the ease with which these pastors – some with briefcase churches – preys on foreigners in name of ‘partnering’ in ‘kingdom building’, when in literal sense they are seeking for sources to finance their largess at a time churches are not witnessing exponential growth or engaged in serious soul winning efforts.
Read more