SUSTAINABILITY

Mwananchi credit to buy off distressed car loans from other financiers

The firm is the only logbook lender currently actively practicing a risk based lending model

In Summary
  • This move comes to help stabilize the logbook and car loan market whose sustainability is being threated by mass defaults across the industry.
  • Mid this year, the company brought down their interest rates and restructured struggling loans and waived 100 per cent of penalties accrued.
mwananchi credit
mwananchi credit

Mwananchi Credit has kicked off plans to refinance distressed logbook and car loans being provided by other lenders.

This move comes to help stabilize the logbook and car loan market whose sustainability is being threated by mass defaults across the industry.

Under the new proposed arrangement, borrowers whose loans are falling behind schedule, and whose lenders are unwilling to discuss favourable restructuring terms can turn to Mwananchi Credit who will buy off the distressed loans under better terms.

This might even result in the borrowers getting a loan top up should the new refinancing terms create room for the same after valuation and analysis is done.

Making the announcement, Mwananchi Credit’s CEO Dennis Mombo said Covid-19 pandemic has resulted in an unprecedented amount of car loan borrowers from most institutions falling behind their payment terms.

''This has even affected our own clients at Mwananchi but we have resorted to discussing and restructuring all loans with our clients and even waiving penalties,'' Mombo said.

He said the firm is now extending the olive branch to other borrowers as well.

This is part of a number of incentives issues by the micro lender to cushion borrowers from economic hurdles brought about by Covid-19.

Mid this year, the company brought down their interest rates and restructured struggling loans and waived 100 per cent of penalties accrued during the Covid-19 period all in an effort to ensure a healthy loan book and happy clients.

Mwananchi is also the only logbook lender currently actively practicing risk based lending model where clients who provide proof of non-default are given friendlier interest rates and higher facility ceilings.

Mwananchi Credit is one of the leading logbook loan providers in the country.

Its diversified product portfolio includes title deed loans , civil servant salary check off loans , import financing and asset financing among others.