Kajiado: Unregulated Shylocks Wreaking Havoc On Desperate Residents

A troubling trend is emerging in Rongai, Ngong and Kiserian towns in the vast Kajiado County -- and residents are getting increasingly concerned.

Unregulated lenders, popularly referred to as shylocks, are on the rise in the said towns, as they target residents struggling with financial turmoil.

According to some of the residents, the shylocks charge as much as 30 percent interest per week -- which translates to 120 percent monthly -- or 1440 percent per year. To put it into perspective, Saccos charge as low as 11 percent interest on borrowed loans per year. Banks do just below 20 percent interest per year.

These deceptive money lenders may look genuine, but their operations are puzzling. They focus on individuals in difficult financial situations, trapping them in potentially destructive agreements.

These shylocks present themselves as convenient alternatives, luring people away from traditional financial institutions burdened with long procedures.

As lending rates soar and credit accessibility diminishes, most Kajiado residents in urgent need of financial aid are turning to these unscrupulous lenders.

Joseph Kirui, a car owner in the area, said he borrowed some Ksh 100, 000 from a microfinance company in Ongata Rongai town, only to find himself entangled in a web of exorbitant interest rates.

The fine print of the contract obligated him to repay the loan with a staggering 30 percent interest within two weeks. Unable to meet the harsh terms, he lost his car, valued at Ksh1.3 million, to the relentless grasp of the shylock.

Similarly, Jackline Mutembei, a small business owner in Kiserian, sought a loan of Ksh 30,000 to rescue her failing venture. Enticed by the promise of quick cash, she handed over her son’s laptop worth Ksh 70,000 as collateral. Little did she anticipate the harsh reality that awaited her – a repayment deadline of one week with an interest rate reaching 30 percent. As she struggled to make ends meet, the laptop became the collateral damage, seized and sold by the unregulated lender.

The lack of regulation in these areas allows the shylocks to operate with impunity. Many borrowers, in their desperation, fail to scrutinize the terms and conditions, leading to dire consequences. 

Simon Kimeron, was another victim. When he faced financial hardships, he sought relief from a shylock promising swift assistance. Borrowing Ksh 300,000 against the title deed of his piece of land located in a prime area of Matasia near Ngong town. He unknowingly signed away his plot.

The shylock imposed an oppressive 40 percent interest rate. Unable to meet the escalating demands, Kimeron faced the heart-wrenching reality of losing his piece of land, a place he was planning to build his home.

The car yards along Magadi Road, displaying repossessed vehicles from defaulted loans, are stark reminders of the widespread suffering.

The stories of those who have lost their homes and lands underscore the urgent need for protective measures. Borrowers are urged to exercise extreme caution, explore alternatives, and unite against the exploitation perpetuated by these silent predators, ensuring that the quiet tragedy does not continue unabated.

Legal experts in the area emphasize the importance of borrowers being cautious, verifying the legitimacy of lenders and avoiding unregulated money lenders. The Kenyan Law of Contracts, while recognizing written agreements, does little to protect individuals who fall victim to these exploitative practices.