• Perceived solution to financial problems comes back to haunt many small traders
• Shylocks are good when it comes to lending but a disaster when it's time to repay
When shylocks landed in Vihiga as generous lenders of money with few restrictions, small-scale businesses thought they were a godsend.
Without knowing the dangers they were landing in, many shifted from the long procedures of financial institutions to this expedient resource.
Even some of those running business empires jumped on the bandwagon, seeing these quick creditors as a shortcut to money for running their day-to-day operations.
Most shylocks would only take your identity card number, phone number and the business location, and the deal was done.
Moses Assanga, a butchery owner in Luanda town, told the Star many businesspeople were duped by these shylocks.
Assanga was initially a lightweight boxer but he exited the sporting sector due to many numerous challenges and joined his brother in business.
His brother was grounded in 2007, which gave Assanga the chance to try the business.
He said when shylocks came, traders thought it was good for them to forgo the long procedures from the banks, but it turned to be a thorn in the flesh and what they need to battle out.
"Once you have made an agreement with those shylocks, when they come, they won't care if you made sales or not. They will be after the money you borrowed," Assanga said.
Many traders say shylocks are good when it comes to lending but a disaster comes when they want their money.
Gideon Akuna, a surveyor in Luanda, said shylocks are only good when you need money urgently.
"The only problem is when it comes to paying, they will never give you time to breathe. They can even sell your house at that moment," Akuna said.
Once you have made an agreement with those shylocks, when they come, they won't care if you made sales or not. They will be after the money you borrowedMoses Assanga
CALL FOR STATE HELP
Assanga says the government should provide quick loans with less restrictions to protect small-scale businesses and other borrowers as well.
He said once such loans have been induced into the business space, they will edge out the shylocks who have grounded the majority of the businesses in the town.
"What we have from the banks is not bad, but before getting a guarantee, security, and approval yet you have an emergency, it becomes an issue," he said.
"Going for a loan from the bank, if it's processed fast, it takes a week. Sometimes you can go for two or three weeks just waiting. And for small businesses like us, we shall have closed the business already."
A trader who requested anonymity said most businesspeople in Luanda town are suffering in silence because of these shylocks.
"Sometimes they help us and when you have the money to pay them, they won't show up. Most of the time they come when you have nothing, demanding their money with those papers you signed," the woman said.
"Something that is in writing and that you have signed becomes an issue. You can't even fight back or ask for restructuring of the loan. It's also expensive."
She said if there was a way the government could organise for quick loans, it would save the situation as compared to long and tedious procedures in the bank.
The trader said at some point, her business was brought down by shylocks during the Covid-19 pandemic, and making a comeback was a problem.
One of the shylocks in Luanda town said they are there to offer financial support to those in crisis either in their businesses or at a personal level.
"Our move is to rescue those who have gotten stuck financially and not to frustrate business communities," he said.
Seeking anonymity, he said as human beings, they cannot make all people happy.
"Even Jesus Christ could not please all people, so we the lenders, we cannot do so," he said.
Another lender, James Akhosi, said some of the borrowers have ill motives when taking the money.
"Some of them come with ideologies of taking the money and vanishing or just ignoring to pay as agreed," he said.
"We have had cases where even some go to police to report that we are extorting money from them, forgetting that we had an agreement with them," Akhosi said.
He said before giving out money, they have to ascertain their clients. However, some pretend beyond doubt until they get the money and show their true colours.
Akhosi said a larger number of their clients behave well in terms of paying back, but a few individuals misbehave.
Some borrowers come with ideologies of taking the money and vanishing or just ignoring to pay as agreed. Some even go to police to report that we are extorting money from them, forgetting that we had an agreement with themJames Akhosi
BANKS ARE BEST?
Equity Bank Luanda branch manager Peter Lubale said the rush to borrow money from apps and shylocks is due to lack of knowledge.
The rates of both sources are high as they are calculated on a monthly basis as compared to banks, where they calculate on a yearly basis.
Lulabe said with shylocks and apps, privacy at times is not there as sometimes relatives, friends and parents are involved when delays in payment occur.
"When we speak of privacy, someone may choose to take a loan for his own business or activities then pay," he said.
"But once the shylocks' time elapses or that app, they will start making calls left, right and centre, even asking people to help you pay."
He said one of the biggest problems with app loans and shylocks loans is that they lead to what overspending on unnecessary needs, which leads to recycling of loans.
"You only borrow to pay another loan. It's like digging a hole to cover another hole," he posed.
Lubale said most Kenyans are not poor but they have been crippled by loan recycling from one app to another, which has not benefited them at any point.
He said Kenyans need to learn on how to spend on basic needs and saving culture to redeem themselves from this financial crisis.
Assanga said most small businesspeople deal with perishable goods that often require a quick market.
"Most of these small traders deal with edible goods that, once you fail to get to the market first, you risk losing them," he said.
"With coolants, you can preserve them at your own comfort. However, even those with coolants at times suffer huge losses when power blackouts hit for long hours."
Moreover, some coolants develop mechanical problems, which also render them to huge losses as well.
"Nyama ikilala inapunguza kilo, which is a loss to me. If spoiled, you have no market again," he said.
He said power bills also in the recent past have been skyrocketing on a daily basis, making traders fail to realise profits in their businesses.
Vegetable vendor Purity Anindo said they suffer huge losses at times.
"Sometimes we fail to sell our vegetables and once they dry up, they lose the value," she said.