Rédaction Africa Links 24 with Kenyans.co.ke
Published on 2024-02-24 01:07:58
Auctioneers stormed the residence of a Presbyterian Church of East Africa (PCEA) reverend in Marururui, Nairobi on Thursday, February 23, in a bid to recover a Ksh7 million loan. The officials, acting on behalf of a creditor, accused the clergy of defaulting on a Ksh5 million loan that was secured in 2019. Following the default, the auctioneers took legal action to obtain a court order for the recovery of their funds after numerous attempts to resolve the issue with the reverend.
“He guaranteed some money up to the tune of Ksh5 million, but he failed to honor his obligation of repaying those loans after he had guaranteed,” explained one of the lead auctioneers involved in the case. Subsequently, the auctioneers successfully obtained court orders demanding the repayment of the Ksh5 million loan along with accrued interest, totaling around Ksh7 million.
Once granted permission to proceed with the recovery process, the auctioneers notified the clergy of their intentions to enforce the court order. They declared, “We managed to proclaim some household items and some motor vehicles, and very soon we will proceed with the sale of these items.” The auctioneers viewed this as a significant victory for their clients, who had acted as guarantors for the reverend.
Recent data released by the Central Bank of Kenya (CBK) indicated a surge in loan default rates to 16% in August 2023, attributed to the rising cost of living. This led to defaults amounting to Ksh596 billion, prompting the banking sector to raise interest rates as a protective measure against defaulters. The CBK specified that a majority of the defaulted loans were concentrated in the mining, manufacturing, real estate, and construction sectors.
During the past two months, there has been an observable increase in auctioneers’ success rates in recovering assets, evidenced by the prevalence of auction advertisements in newspapers. The properties put up for sale ranged from large estates, vehicles, to land parcels across the country.
In response to the growing default crisis, auctioneers have been actively engaged in enforcing court orders to recover outstanding debts on behalf of their clients. The trend of auctioning off valuable assets belonging to defaulters has become more prominent, reflecting the financial strain faced by individuals and businesses due to economic challenges. As loan defaults continue to rise, it is crucial for borrowers to fulfill their financial obligations to avoid facing similar consequences.
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