Micro-financier Mwananchi Credit has accused its competitors of sponsoring a smear campaign in the media, with allegations of predatory lending.
In a statement, Mwananchi Credit said that it lends people according to their risk factor with lower risk getting lower rates and higher risk being commensurately weighed.
“Reference is made to a number of media reports that seem to insinuate that our company is practicing predatory lending by charging exorbitant interest rates and loan charges. While in the past we have opted to ignore these baseless allegations and rumours, we now feel that our detractors have used our silence to gain steam and propel those innuendos even further,” the statement read in part.
The company said that its appetite to assume higher risk enables them to expand the bracket of those who qualify for credit which has resulted in thousands of Kenyans being able to grow their businesses and deal with their emergencies through Mwananchi Credit’s financing facilities.
The lender charges interest rates between 1.67 and 3 percent, which is among the lowest for its peers.
“In case of defaulted loans, like any other financial institution, some penalties may be accrued. But as a matter of good faith, whenever the customer has shown the desire and commitment to repay their loans, we have always shown goodwill by waiving most of the penalties, in some cases as much as 100 percent. A combination of the above factors have contributed to the fast growth of Mwananchi Credit; a fact that is not lost on some of our competition, who are directly at the forefront of some of the false allegations via proxies,” added the company.
The company however accused high net worth borrowers of taking advantage of their goodwill, by borrowing and refusing to pay leading to court battles.
“Mwananchi is one of the few Micro Finance Institutions that offer large sums of loans to single individuals. Because of this, a few wayward clients, most of them high net worth, have come to borrow monies from Mwananchi Credit with the sole intention of not repaying those monies. They have perfected the art of misusing our legal processes to buy time while in the meanwhile using media to blackmail us in the hope that they do not repay their loans. However, the fact that some of these matters are already in court limit our capacity to discuss them,” said the lender.
Mwananchi Credit Limited is one of Kenya’s leading non-deposit-taking microfinance lending institutions based in Kenya. It is 100 percent Kenyan-owned and currently has eight branches across the country.