Kenya’s rising debt crisis has once again come under the spotlight after a woman publicly shared her struggle with multiple loans, including one from a church, during a lively discussion on Classic 105 FM.
The conversation, hosted by Maina Kageni and Mwalimu King’ang’i, explored the growing reliance on informal lenders in a climate where traditional banks are increasingly cautious.
Listeners described the “Shylock economy,” a phenomenon fueled by banks’ reluctance to lend to ordinary Kenyans. Historically, banks offered loans of KES 1 million or more without stringent checks on borrowers’ existing debt. Today, however, non-performing loans have ballooned to KES 69 billion, creating a gap that informal lenders are eager to fill.
Among the callers, Wambui from Limuru shared a detailed account of her financial strain.
“I have a Hustler Fund loan and another for M-Shwari, Ksh 25k, which I’m supposed to repay today, but I don’t have.
I also have a Catholic church loan that I’ve taken twice,” she said. She added that the church loan alone amounted to KES 52,000, with her M-Shwari loan accruing interest of KES 2,000.
Other listeners revealed equally dire situations. One woman detailed debts dating back to 2019, now totaling KES 100,000 after fines and penalties, compounded by job loss and business closure. She described how daily expenses, including KES 400 for her son’s medication, make repayment impossible. Another caller, Richard, said borrowing from loan sharks had cost him KES 5 million this year, forcing his business into auction.
The discussion also highlighted predatory practices within the informal lending sector. Peter Kemboi noted that while loans are readily given, default often leads to complicated and aggressive recovery tactics.
Jeff, another listener, explained that some lenders strategically design contracts to ensure borrowers default, then seize and sell mortgaged items at inflated prices. Many, he added, now employ police and Debt Collection Agency officers to pursue defaulters.
The radio conversation underscored the harsh reality facing many Kenyans, caught between limited banking options and the high-risk, high-pressure world of informal lenders, highlighting a growing socio-economic challenge that continues to affect thousands across the country.
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