Mwananchi Credit, non-deposit-taking microfinance, has rubbished claims that it is engaged in predatory lending.
In a statement, the firm which engages in risk-based lending accused its competitors of engaging in a smear campaign through proxies, in a bid to outfox them from business.
“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 accusations and rumours, we now feel that our detractors have used our silence to gain steam and propel those innuendos even further,” the company said.
The lender also accused some of its borrowers, whom it termed as high net-worth borrowers, of refusing to pay their loans, and later misusing legal processes to buy time while engaging in a smear campaign.
“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 intimidate 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 Mwananchi Credit.
According to Mwananchi Credit, its appetite to assume higher risk has enabled thousands of Kenyans to grow their businesses and deal with their emergencies.
“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. We are among the most restrained when it comes to reaching the drastic level where we have to recover the collateral asset,” the company said.