# FREEPIK and subsequent expenditure . This is meant to bring inflation down . The Central Bank of Kenya has begun to increase interest rates but inflation is still going up . The question we may want to ask ourselves is how come this is happening ?
For banks , the Non-Performing Loans ( NPLs ) have increased significantly which has forced them to increase their loan provisions in order to cushion against possible defaults .
With this high default , the banks have no option but to limit losses , and for secured loans they have to take measures to realize their securities hence , they will institute a process to attach the securities .
Ordinarily , where a borrower is in default and all relevant statutory notices have been issued by the lender , the Court is usually slow in curtailing the lender ’ s right to realize its security through exercise of its statutory power of sale , since the borrower ’ s claim , if found to be successful at trial , can sufficiently be compensated by an award of damages .
As per the legal requirements , attachment orders are executed by auctioneers . Many property owners are staring at a bleak and unpredictable future , with the auctioneers in hot pursuit . A friend revealed to me that he had taken a loan facility two years ago , by then he had enough cash flows to service loans , but then for the last six months he has had a challenge of getting any supply contracts meaning he cannot raise money to pay his loan instalments and the bank without hesitation has begun the process to attach his home at Thome
estate . Though I advised him to sell it and settle with bank before they attach it , he has hardly got customers yet the auction dates are fast approaching .
Kenyans residing in upmarket areas are losing their hard-earned properties due to auctions , in fact the dailies have long lists of auction properties , even the auctioneers themselves concur that getting buyers of auction properties in some instances is not as easy as it seems . The auctioneer yards are filled up with attached movable properties as more and more stream in .
The increasing number of auctions in the real estate sector is indicative of the kind of financial struggles the borrowers are undergoing in an economy that has also experienced a number of job losses and almost stagnant salaries with an everincreasing cost of living , notwithstanding the enhanced statutory deductions .
The auctioneers are also feeling the heat . It is reported in some circles that for over a year now , auctioneers and banks are stuck with prime commercial properties with no buyers in sight , even at cut prices . A bank staff once told me that nowadays some banks are not prioritizing auctioning customer properties , instead they prefer to enter into a repayment arrangement as long as the customer is cooperative . This assists in reducing the effect of having customer properties held by auctioneers without being sold and the customer is not paying expecting the security to cover for the payment .
Come to think of it surviving on credit and avoiding default as a borrower in
Kenya is akin to surviving at the battle front , given the accessibility and how customers are lured to credit products only to face the barrel of auctioneers . However , with responsible financial management , education , and careful consideration of borrowing decisions , individuals and businesses can navigate the credit landscape while minimizing the risks associated with default . It is crucial to remember that while credit can be a useful tool , it should be used wisely to build a stable financial future rather than create a cycle of debt .
During periods of high inflation , rising costs can be a huge source of stress . But a few changes to your financial plan can go a long way in lessening the impact on your household budget . Credit being like a filling station you may be compelled to fuel at any time , so no matter the circumstances one should strive to have sources to call to once the credit tank is running low .
I sign off by quoting Horace Walpole who says that “ Credit is like a looking-glass , which when once sullied by breath , may be wiped clear again ; but if once cracked can never be repaired ”
Wasilwa Miriongi is a Certified Credit Professional currently working as the Managing Director , Del Creder Credit Management Limited . You can engage him on this or related matters via email at : WMiriongi @ gmail . com