One year ago, cnyakundi.com predicted the fall of Faulu Microfinance Bank following damning claims of nepotism, fraud and corruption that marred the once-successful venture.
A dossier sent to the editor of this site unearthed tribalism, sexual harassment and internal dealings between senior staff and auctioneers at Faulu Microfinance.
The MD, Mr. Apollo Njoroge faced accusations of not being a team player and witch-hunting senior managers for having leaked confidential documents to the media concerning a list of all staff employed that favour one region.
Fears were rife that auctioneers engaged by the bank were wining and dining with the management.
There were also issues to do with salary disparities within the bank and suspicious allowances payments to the top managers.
Months later, the chickens have come home to roost.
On Tuesday, November 8, reports emerged that Faulu is closing down six branches, becoming the latest financial institution to trim its physical branch network.
The branches to be closed are Gikomba, Limuru, Nanyuki, Kiserian, Homabay and Bondo.
The planned closures at Faulu follow a similar decision last year when the microlender shuttered outlets in Nakuru, Taita Taveta, Meru, and Kirinyaga.
Following this latest development, disgruntled clients are slowly gathering the courage to come forward and confirm initial suspicions of internal fraud.
The narration below is from a trusted source who sadly describes how the bank is playing mischief with a loan he secured at the height of the pandemic in 2020.
Despite diligently submitting his monthly deductions through his employer, the bank irregularly reported him as a defaulter to the CRB and forwarded the entire amount to auctioneers who are now threatening to cart away his assets despite the loan being in a performing status.
According to the victim, top executives at Faulu Bank have been in constant communication with auctioneers to harass him.
They even forwarded his details to other MFIs for possible buy-offs yet he is honouring payments.
“Hi Nyakundi,
Thanks a lot for highlighting the issue of Faulu DTM in relation to internal fraud.
I am Fred.
I lost my job sometime in 2010, thereafter my loan which I had with a local bank since I didn’t have a stable source of income to settle the loan was forwarded to the Credit Reference Bureau.
Upon securing a new job I had some personal emergency problems.
With no option never forgetting I had been blacklisted, I had to approach Faulu DTM for a loan of Sh810,144.00.
I was charged KES.36,666.00 as Credit Life Charges plus set up fee of Sh26,190.00 which amounted to Sh.873,000.00.
The loan was approved on the 7th of April 2020.
Recently upon getting my CRB report from Metropol Credit Reference Bureau, I was shocked that almost two weeks later after the loan application i.e on the 1st of May 2020, I had been reported as a defaulter to the CRB and hence blacklisted again.
Up to now, my loan is in a performing status.
I am still paying it directly via my employer.
In fact, my October deductions have already been submitted to Faulu DTM.
Unfortunately, the whole amount has been forwarded to Keysian Auctioneers for debt recollection and I am being threatened that I will be auctioned yet my security which is reliable is my payslip since I am an employee of one of the counties.
I am even being pushed to pay the whole amount.
I am contemplating taking legal action, moresore for being blacklisted two weeks after taking the loan and after making all the necessary commitments.
What I suspected is that Faulu DTM there is internal fraud since the same loan sales executives are in constant communication with auctioneers to harass me and also forward my details to other MFIs for possible buyoffs.
Kindly hide my identity since people will really laugh at me if they realize my predicament.
My colleagues are developing, I am unable to move out of this cage of debt.
At one point in time, I was so depressed since I survive from hand to mouth,” the source says.
