In three months, three banks have undergone receivership in Kenya with Chase Bank being the latest casualty. Prior to Chase Bank, Imperial Bank and Dubai Bank were placed under receivership by the Central Bank of Kenya under the leadership of Patrick Njoroge.
Njoroge, who took over from Prof. Njuguna Ndungu 15 months ago, has been viewed as the savior of Kenya’s banking industry despite some criticism from the opposition Cord.
However, one question remains unanswered; Will the CBK chief also reign on rogue money-lenders who have taken advantage of desperate Kenyans to milk millions of shillings from struggling wananchi?
One such case that should be on Njoroge’s watch-list is Platinum Credit Limited. Most Kenyans have heard or read about Platinum Credit Limited, a loan-offering facility that processes cash for clients within 24 hours with the ‘best’ interest rates ever.
Platinum Credit LTD, which is owned by a Mzungu offers loans at highly ‘competitive’ rates thereby beating banks, micro-finances and saccos.
But what the secret behind Platinum’s crazy offers?
First to note is that Platinum Credit does not offer loan facilities to media personalities such as journalists, editors, bloggers and reporters, something that raises questions on the credibility of its business.
A source who spoke to www.udaku.co.ke on request of anonymity and who is a journalist at a leading media house and is currently working on an expose on how Platinum Credit LTD ‘cons’ Kenyans of millions of shillings said that he, in his line of duty as an undercover investigative reporter, walked to Platinum Credit and applied for a loan.
In the initial stages, he was asked to produce some security that could be used as a collateral in case he defaults. Little did Platinum Credit know that he was doing his job and was ready to default to see what happens next.
The first shocker was the interest rates. Using his car’s log book, a loan less half the amount of the car was approved within 48 hours – true to their word. He received a loan of Ksh 650,000 which attracted an interest rate of 5%.
Mathematically, the interest he was supposed to pay was Ksh 32,500, meaning he was supposed to pay Ksh 682,500 within a period of six months, a rough monthly installment of Ksh 113,750.
However, this was not to be, the total interest attracted by the loan is added to each monthly installments. The loan amount (Ksh 650,000) is divided by the number of months one wishes to clear the loan – giving him Ksh 108,334 per month and the total interest added monthly. This means that instead of paying Ksh 113,750 per month, he was supposed to pay Ksh 140,334 per month, which gives a total of Ksh 845,000 instead of Ksh 682,500.
As if this is not enough, he was charged a legal fee of Ksh 20,000, an administration fee of Ksh 5,000 and an insurance fee of Ksh 7,650.
To make matters worse, a penalty of Ksh 30,000 was slapped on him after he failed to pay the requisite amount on the D-Day and a message to repossess his car sent to him.
He told www.udaku.co.ke that thousands of Kenyans have lost property such as motor vehicles, land and houses of dubious Platinum Credit deals that are not controlled by Central Bank.
Part Two of this story comes up tomorrow with damning details of how Platinum Credit cooks books, forces loanees to surrender property, how the Directors have transferred the repossessed vehicles, lands and houses to their individual names, and why it does not offer credit facilities to journalists.
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