The Banking Amendment Bill, 2015 which is currently awaiting the President’s signature has pitted commercial lenders against ordinary borrowers. The banks do not want to be compelled to lower interest rates, which currently average about 18.5%, for obvious reasons.
CBK governor Patrick Njoroge and Treasury CS Henry Rotich are also opposed to the bill, and it is very likely that Uhuru will side with them.
The Kenyatta family owns majority of Commercial Bank of Africa (CBA), and already this is been seen as a conflict of interest.
As the debate continues, one Kenyan, Larry Liza, has taken to Facebook to narrate a story of how a bank ruined his friend’s life, driving him to commit suicide.
Some years ago, I used taxis a lot from Nairobi’s CBD. Caleb was my favourite guy, who paid the car owner 7K per week, that is 1K per day, and saving the rest of the profit after fuel. Yet still, life was tough, for sometimes by the weekend, he would only be left with 2K. On a good month, he made about 30K after fuel, 28K for the owner as he netted as low as 2K a month on bad months. He lived with his wife and 6 children in Kibera slums, plus two more nieces from a late brother. Anyway, one day Caleb picked me in a brand new car. His 5-year dream had finally come to fruition. He had saved 200K over the years, and took a loan of 950K from one of the popular commercial banks. He was expected to repay 20K per month and he knew he’d save 10K for his family every month before finally having all the profit for himself.
I was impressed by Caleb’s determination and strategy to pay more so he could earn his freedom in 3 years instead of 6. Then Kenya’s fiscal crisis came and the loan rates were hiked abruptly. His bank told him that he’d now pay 25K instead of 20K and for 7 years instead of 6. It was as shocking as the news that his wife, who was in labour, was having a complicated delivery and lost the baby. She had to be in HDU and couldn’t attend her infant’s funeral. Caleb looked strong yet forlorn during the funeral at the Lang’ata Cemetery. The eldest daughter, only 14 and a candidate for national primary exams, wore one of my black t-shirts, while neighbours had also shared black t-shirts for the 4 of the children who had none. A tailor neighbour had made white ribbons for them.
Caleb’s wife stayed in hospital for 1 month, the bills soaring as he shuffled between work, hospital and home to see the children, especially the last born who was only two. Well, he did not hit his target that month and defaulted the loan. He explained to the bank’s relationship manager who urged him to pay up within 21 days. He committed to working day and night, but that was cut off when he got to the hospital and found the wife’s bed empty. I visited the family the following day. It was a single roomed house, the parents’ bed section separated by a curtain. Caleb was on one corner making a meal for his children, something he insisted to do that day in spite of the neighbours fully supporting him. The wife’s funeral would take place in 2 weeks as they attempted to raise the cash to settle the hospital and funeral bills. It was another two months later when I called Caleb for a taxi ride. ‘Sina gari, he said, bank imechukua!’ His car had been repossessed by the bank and auctioned within days. Guess who bought it at a throw away price? A brother to one of the bank auctioneers who gave it to a different driver to continue the taxi business.
My eyes tear for my people when I hear some countries charge interest rates at 1% to 4%. My heart shudders when I see some Kenyan banks charging over 25% interest rates to the poorest of all. I ponder over the arguments for or against controlling interest rates. I wonder why it has to take the Banking (Amendment) Bill capping interest rates to see banks rolling over themselves pretending to care for the Kenyan borrower. I fear the president might not sign the bill sighting positive measures that are taking place. I feel like blackmailing him with my single vote but I know the teaming confidence that he may be reelected anyway. Oh, and just in case you are wondering about Caleb, I called him one day, shortly after the auction, and his number went unanswered. A few days later, his daughter picked and said one word: ALIKUFA, which means ‘he died.’ He had been buried a week earlier. The children said he slept and never woke up. But the near emptied glass was on a stool next to his bed with a package that told it all was found in his trouser pockets. He had scribbled some words on it; ‘Bank Imeniua!’ (The bank killed me). Blessed week.