How micro-finance companies are illegally milking cash from police officers

How micro-finance companies are illegally milking cash from police officers

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For years, police officers have raised concerns on the manner in which they have been losing their hard-earned money to micro-finance companies. Now, details of how the officers have been losing their cash to the lenders can be revealed.

In many cases, police officers have only been spared imprisonment through the intervention of the Commandant Judiciary Police Unit Mr Lazarus Opicho. In a statement released on May 30, Mr Opicho gave a detailed account of how two officers almost lost millions of shillings to the lenders.

In the first incident, Ms Ivy Wangila, who is based at Kamukunji Police Station, took a loan whose total amount plus interest was Sh1.1 million. She used the money to purchase a car which she registered under the cab-hailing app Uber within the city.

Ms Wangila is reported to have paid Sh200,000 and had a balance of Sh900,000. After two months she communicated to the manager through email with an intention to offset the loan. When the micro-finance firm took too long to respond she did a reminder and the manager of the company asked her to go ahead and offset the loan.

But she was in for a rude shock after officials from the company arrived and drove away the car valued at Sh1.3 million while she was in the process of offsetting the loan. The company then sold the car within three days at a throwaway price of Sh800,000 and sued her in court while still demanding Sh500,000.

However, Mr Opicho intervened and the company was subsequently instructed to return the vehicle and pay for damages as the officer continued to service the loan.

In yet another incident, an officer identified as Johana Kumomuru, who is based at the Critical Infrastructure Police Unit (CIPU) in Athi River, almost lost more than Sh1 million and even risked being jailed.

According to Mr Opicho, he was informed by CIPU Commander Athi River region Mr Mohammed Noor that one of his officers was supposed to be arrested over a loan he had taken from a micro-finance company.

The officer took a loan of Sh700,000 in 2019 and had paid Sh220,000 with a balance of Sh480,000. But when Covid-19 struck in 2020, the loan was suspended and he was asked to start paying in 2021.

One morning, the officer was surprised when the company came for his tractor which was valued at Sh2.4 million and sold it at a throwaway price of Sh670,000. The company then went ahead and sued him for Sh942,000.

However, Mr Opicho intervened in the matter and ensured that the warrant of arrest was cancelled.

The National Police Service is now requesting police officers to ensure they understand the deals they sign, especially when it comes to taking loans.

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