Bank Takes Loan Defaulters To Court

Wednesday, 10 September, 2008

Gone are the days when accessing loans from banks and other financial institutions were painstaking. These days, the institutions prompt customers to borrow, even without collateral. And in less than 48 hours, one could easily walk home with an unsecured loan.

Many Kenyans have gone in for the unsecured loans. All they are asked to table is evidence that they earn a monthly salary.

Once both parties agree on the terms, a binding contract is born.

It should not be lost on the borrower that the lender would go to any lengths, including court action, to recover the loan.

Barclays Bank of Kenya (BBK) last month filed five cases in a day against its loan defaulters, sending a clear warning it was not going to be business as usual. Through Miller and Company Advocates, the bank filed separate suits to recover more than Sh2 million from five customers. In the suits filed at the Milimani Commercial Courts, the bank is seeking to recover the loans issued in 2004.

The defaulters

BBK has sued four clients for defaulting loans and one for failing to pay for a credit card expenditure that overshot the limit. The bank wants the defaulters to repay the loans including the interest accrued for the last four years. The alleged loan defaulters are Mathew Kague who owes the bank Sh551, 927, Joseph Mbogo (Sh364, 517), Lydia Wanjugu (Sh629, 773) and Margaret Mwangi (Sh261, 367).

It also wants Christine Nguku to pay Sh194, 603 for over limit credit card expenditure.

BBK says the defendants opened and operated accounts with them prior to taking the loans. The bank avers that in 2004, the customers applied for loans and were granted after agreeing to repay in specific monthly installments.

BBK states that soon after the loan was advanced, the defendants defaulted in repaying the installments that included interest. Despite demand having been made and notice of intention to sue given, the defendants have failed to settle the amount, the bank states.

Source : http://www.eastandard.net/