Mwananchi Credit on the Spot for Trying to Auction a Client’s Vehicle Even After Loan Was Repaid in Full


Mwananchi Credit Limited are on the spot after they allegedly declined to release a client’s car plus his logbook months after clearing his loan.

The client accuses the company of taking advantage of the covid-19 pandemic situation to charge higher interest rates and penalties on a loan he defaulted after the country was put on lockdown.

In late 2019, Mr. Dennis Otieno took a buy off loan of Ksh. 1, 030, 562 which was used to purchase a Toyota Hiace Matatu.

Up until when President Kenyatta ceased all inter county movement, Mr. Otieno was comfortably paying his monthly installments of about 84,000/.

The countrywide lockdown was a blow to him as his Matatu business grounded and to make matters worse he lost his job.

In April he was not able to repay the month’s installment and things got from bad to worse as Mwananchi quickly repossessed his vehicle which was plying the Nairobi Kisii route.

For a man whose sources of income had dried up, the financial institution did not come to a reasonable agreement with Mr. Otieno and between the months of May and September, he managed to secure another loan from Rafiki Bank which he used to offset the 1 million loan which had now accrued to Ksh. 1.7 million.

After negotiating with Mwananchi Credit, Otieno was given until August 27th to clear his loan upon which his vehicle and logbook would be returned to him.

In a guarantee letter dated 24th August 2020, Mwananchi Credit, unconditionally and irrevocably agreed to release Mr. Otieno’s vehicle and logbook within 48 hours after Rafiki Bank paid the total 1.7 million buy off from them.

“We shall within 48 hours of the payment of the outstanding loan….commence the transfer process of the logbook from our name to that of Rafiki Microfinance Limited” read part of the undertaking guarantee letter.

In the guarantee letter, Mwananchi Credit through their advocates promised to refund the money within 48 hours if they fail to complete the transfer to Rafiki Bank’s name.


On the 9th of September, Rafiki Bank bought off Otieno’s loan and repaid Mwananchi in full, one week after the agreed period of payment.

Otieno’s troubles escalated when upon going to claim his repossessed vehicle and logbook he was asked to pay another Ksh. 502,000.

The company has been taking Otieno in circles demanding that he repays the money. The complaint says that he has no idea where the money came from yet Rafiki Bank already bought off the loan in totality.

Otieno claims that Mwananchi Credit Limited Director, one Mr. Dennis Mombo said that the penalty was for failing to repay the loan on time, after Rafiki Bank delayed by one week and half in disbursing the money.

For 4 months now, his only source of income has been lying at an auctioneer’s garage in Kisumu.

Otieno further says that he was astounded when he stumbled upon an advertisement in Daily Nation’s copy of November 16th, where his Matatu had been put up for Auction on behalf of Mwananchi Credit Limited.

Otieno is now rapaying Rafiki Bank’s 1.7 million loan, a feat he says is burdensome since his source of income has been held and put up for sale.

Reached for comment, Mwananchi Credit refuted Otieno’s claims saying that he still owes them 502,000 shillings.

Until the time of going to press, the company had not provided documentations proving that indeed Otieno did not pay them all the money owed to them.

All Mr. Otieno wants is for the company to keep the end of their bargain and release his vehicle and logbook unconditionally.

At time and era, when wananchi are facing uphill financial woes due to the coronavirus pandemic, financial institutions should not be taking advantage to milk Kenyans dry.

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