Mwananshi Credit has failed in its attempt to lift an injunction preventing the small lender from selling two trucks owned by two dealers that were seized because of a disputed loan.
High Court Judge Kizito Magari has upheld the Milimani Magistrate’s injunction restraining the micro-lender from selling the two trucks – a Mercedes and a Scania, which were impounded in March 2021.
The court was told that Peter Kamau Githwa and Elizabeth Wanjiku took out a loan of Sh2.5 million and asked the traders for collateral with the trucks. The traders said they had repaid Sh3 million but the lender was still demanding more money.
Judge Magari noted that the traders had made representations and demonstrated that it was likely that the debt would be repaid in full.
Secondly, the judge said that Mwananchi Credit was not a mortgagor because the mortgage of the chattels (the loan used to purchase the vehicles which served as security for the loan) was not registered, making the attachment void and the amount claimed fictitious.
“There is also an allegation that the sum of Sh9,254,767 is due according to the records maintained by the appellant (Mwananchi). I am not a student of witchcraft and sorcery but I am unable to understand the maze or mathematical permutations and blatant distortion of figures that caused the sum of Sh2,500,000 to turn into Sh9,254,767.24 despite having paid Sh3 million,” the judge said.
The court was told that the seizure of one of the trucks was carried out in a manner similar to that of criminal gangs.
“If we allow our microfinance projects to fall into the same school as the usurers, the court will be failing in its duty,” the judge said.
The microlending institution applied to the Supreme Court after the lower court ruled to block the sale on the grounds that there was a valid claim and it had been registered.
But the merchants confirmed that they had paid all the amounts due to them.
One of the trucks had an accident, but they continued to repay the loans, Ms. Wanjiku said in an affidavit.
In March 2021, the lender impounded one of the vehicles and ejected the driver from public transport, demanding a balance of Sh9.2 million.
Then, Senior Principal Judge DW Mburu issued an injunction in October 2021, pending the determination of the case.
