A borrower has blamed corruption in the country and poor economy for his failure to service a Sh27 million loan owed to Housing Finance and asked the bank to restructure his loan.
Wilfred Kihara told the court he fell on hard times after corruption ruined the economy and now the lender wants to sell his property.
He has had to sell a separate property to pay part of the debt and has allowed HF to collect rent from his tenants yet the bank was bent on auctioning his property whose value was way bigger than the loan arrears.
He told the court that he wants the lender to renegotiate the loan terms to make it flexible for him to pay back.
“The applicant, having obtained a loan of Kes 27,000,000 from the defendant in 2015, has been faithfully servicing the loan till sometime in the year 2018 when he started experiencing financial difficulties brought about by the poor economic state of the national economy coupled with wanton corruption in country,” Lady Justice Wilfrida Okwany said.
He went to the bank and promised to sell another property to regularize his payments but HF proceeded to advertise the charged property for sale.
So he obtained a stay order on the bank and in the meantime he managed to sell the separate property and pay the sum of Kes 7.3 million to regularize his account.
He says his misfortune worsened after a confusion by his lawyers, who diarized the wrong date for hearing as June 7, 2019 instead of May 7, 2019 and so missed his court date.
He continued pleading with the lender without yielding much result and in September 2019 the bank again tried to sell the property.
However, after further talks, HF agreed to suspend the auction if he provides bank statements from other banking institutions, instructs his tenants to make direct payments via HF’s Pay bill at the end of every month henceforth until the loan is fully settled and deposits Kes 340,000 into the loan account being the monthly instalment.
He says he complied but the bank would not renegotiate the loan and went ahead to issue a new notice in July 2020 at the height of the Covid-19 pandemic.
He said he will be able to settle the arrears due if given ample time once his application for loan restructure is considered and approved.
Judge Okwany granted Mr Kihara a stay because he had shown beyond all odds that he was willing to pay HF and did not want to lose the property which he claimed was valued way above what he owed the bank.
“I find that the instant application meets the conditions set for the granting of interim orders of injunction as the applicant has not only demonstrated that he has a prima facie case against the respondent, but that he will suffer substantial loss should the suit property be sold when he has already made efforts and is still willing to settle the debt,” Judge Okwany said.
“I note that the applicant has been diligent and has, against all odds, been keen in settling debt owed to HF. It is clear that the applicant is not on a mission to merely buy time or frustrate the HF’s realization of its security,” she said.