There have been an increase in aunctions as recorded by some banks. This is as a result of the increased number of loan defaulters during this low economy time.
Most borrowers can repay their loans. This includes both individuals and businesses that took loans sometimes back before COVID-19 pandemic.
Kenyans lost jobs due to layoffs, pay cuts, employees being sent on unpaid leaves and collapsing of businesses as a result of Coronavirus outbreak.
Housing Finance (HF) for example auctioned houses worth ksh 717.1 million to recover mortgage facility that were long overdue.
“We have taken an approach of agreeing with customers to transfer the facility to us at an agreed price for us to sell given the distressed property market. Some of the houses have now been sold,” said Mr Kibaara in an interview.
Stanbic bank on the other hand recorded auctioning vehicles and assets worth ksh 312.3 million from defaulters during the recent ended financial year.
At Stanbic Group, it is recommended to sell the assets instead of making the assets belong to the bank after borrowers fail to repay their loans.
“It is the Group’s policy to dispose of foreclosed properties on the open market, at fair market value.
“The proceeds are used to reduce or repay the outstanding claim. In general, the Group does not occupy foreclosed properties for business use,” said Stanbic.
Due to the ongoing Coronavirus pandemic, auctions are expected to increase even more in the coming months.
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