In a small office tucked away in Nairobi’s bustling city centre, on June 11th 2022, a man approached Momentum Credit seeking a loan of Ksh400,000 to cover some personal expenses.
In exchange, he offered his Subaru Forester as collateral.
According to the source, the terms of the loan were clear: he would pay back the total amount of Ksh524,500 over the course of three months, with a minimum monthly payment of 46,500 Kenyan shillings.
He made the first two payments on time, but when it came time to pay off the remaining balance in September, he was shocked to learn that the outstanding amount had grown to Ksh533,573.
Feeling frustrated and misled, he sold his car in order to pay off the inflated amount.
He then sought answers from Momentum Credit, but was met with little more than vague explanations of “errors” and “miscommunication.”
Despite receiving some refunds, he felt that he had been taken advantage of and permanently severed ties with the lender.
“I was extremely frustrated by Momentum and I had no other option other than to sell my car to settle the above-inflated figure with immediate effect,” he wrote to this blog on Friday, January 27.
“I paid the so-called outstanding amount of Sh533,573 and I decided to seek answers the following week.”
The experience left him feeling bitter and disillusioned.
“I had to pay more than what I had borrowed and I lost my car in the process. This is not how business should be done,” he lamented his submission.
The story above is not an isolated incident.
Across Kenya, stories of predatory lending practices and exorbitant interest rates are all too common.
These “loan sharks,” as they are colloquially known, often target the most vulnerable members of society, preying on their desperation and lack of access to traditional banking services.
This latest case serves as a stark reminder of the need for increased regulation and oversight of the lending industry.c
Consumers must be protected from marauding practices!
