Women hide in forests to avoid cunning shylocks

Three women walk beside the Nyayo tea zones at Ndumanu Village in Mathira, on their way to Mt Kenya forest on August 8, 2016 where they seek refuge in fear of being ambushed by Karatina Shylock Traders after defaulting . PHOTO;KIBATA KIHU/STANDARD

Borrowing money from shylocks has been widely accepted by Kenyans as a way of solving short-term financial problems, with a promise to repay the debts.

And with many unable to meet stringent lending conditions and high interest rates imposed by banks, many rural folks, especially women, now turn to shylocks to obtain soft loans.

But in Giakaibei village, Mathira, Nyeri County, the system has turned against the borrowers, with over 100 women fleeing their homes and camping in the nearby Mt Kenya Forest, oblivious of dangers posed by wildlife, to hide from the shylocks. Others have relocated to neighbouring towns such as Meru, Nyeri and Kirinyaga.

They claim the shylocks harass them and work in cahoots with officers from Karatina Police Station to coerce them to pay the debts.

Karatina deputy OCPD Stephen Muoni however says his officers only deal with criminal matters and advised those harassed by police to report to him.

“We are a professional force capable of detecting a criminal element. The station cannot be used to to settle civil matters,” says Muoni.

Shelmith Gathigia 35 and a mother of two, at Giakaibei Village in Mathira on August 10,2016,she escaped death narrowly after she attempted to commit suicide over a Sh100,000 loan that could not afford to pay to Karatina Shylock Trader.PHOTO;KIBATA KIHU/STANDARD

Shelmith Gathigia, 36, says creditors ambushed her one morning, demanding back in full the Sh20,000 she had borrowed, but she had no money. This led her to attempt a suicide by drinking a farm chemical.

“I was unable to bear the humiliation and on February 4, I decided enough was enough and there was no point living any longer,” Gathigia says at her Kiarage home.

She, however, survived the ordeal and was admitted to Karatina Level Four Hospital for two weeks.

Gathigia had borrowed Sh100,000 from a micro-finance institution to start a business, but the enterprise collapsed within a few months and she was unable to repay the loan.

With the institution demanding payment, she approached a shylock and obtained a Sh20,000 soft loan payable in two weeks with a 30 per cent interest, in addition to Sh2,000 application fee.

“With interest fast accumulating, the principal amount unpaid and I being chased after daily, I could not take it anymore,” she says.

For Leah Nyambura, the problem started when her brother-in-law borrowed Sh200,000 loan from a shylock using her three-quarter-acre land as security.

To date, the mother of seven says the amount has accumulated to over Sh1 million, with the creditors threatening to auction the land she inherited from her late husband Simon Githenji.

“Effort to put restrictions on the land transfer at the district lands registry have not borne any fruits, since I don’t know the land number. The title is being held by my in-laws,” a worried Nyambura says.

Magdalene Nyaguthii says she was surprised one day when four people - two men and two women - came to her home, demanding to take her only asset (cow) away.

“I struggled with them, trying to defend my only source of livelihood, but I was overpowered,” Nyaguthii says.

She had taken a Sh20,000 loan from a shylock to pay for her son’s school fees.

Nyaguthii was required to repay the whole amount plus Sh6,000 interest, which translates to 30 per cent, and Sh1,000 application fee within three weeks.

Interestingly, she was advised by the shylock to borrow the outstanding amount from another shylock to settle the first debt. Nyaguthii borrowed Sh30,000, which she would pay back in full as Sh42,000, inclusive of interest and a 10 per cent application charges.

Since then, she has been borrowing from one shylock to pay another in an endless circle, with the debt now standing at Sh150,000.

In the same village, Teresa Mugo borrowed Sh40,000 from a local shylock. First, Sh4,000 was deducted as a loan application fee, leaving her with Sh36,000, even though the amount applied for was Sh40,000.

She was required to repay within three months at a 30 per cent interest rate, translating to Sh12,000 in monthly instalments for two months and Sh52,000 in the third month. In the end, she would pay Sh76,000, up from the Sh36,000 initially borrowed.

When she failed to pay, like many defaulters, she was advised to borrow from other shylocks. So far, she has borrowed from eight traders, with the amount currently standing at Sh700,000.

“What started like a loan of Sh36,000 has shot up to over Sh700, 000 within a year. I have no idea where to get the money,” Mugo, a widow, says.

Margaret Njoki and three other women were not lucky when they tried to run away, as they were arrested on July 27 and locked up at Karatina police station for a whole weekend.

“Upon arrest, I was booked for the weekend. A friend bailed me out. I was only released after she paid Sh35,000. Currently, I owe shylocks over Sh80,000,” Njoki states.

She says the loans keep on skyrocketing, as most borrowers are unable to service them due to exorbitant interests.

“Rates are so high that within just six months the Sh36,000 that you received shoot up to over Sh120,000,” Njoki notes.

Others like Peter Wandeto,75, have also fallen victim to this game after one of his daughter borrowed Sh35,000.

“I came home to find an empty pen. I was told a shylock based in Karatina drove away my heifer and two goats over a Sh35,000 debt my daughter had borrowed,” Wandeto, who runs a butchery, explains.

Ndumanu assistant chief Paul Kimaru says the shylocks have invaded Karatina town like a swarm of bees, pursuing defaulters and are determined to cart away anything on sight, including livestock, to recover the money owed.

Villages worst hit include Kiarage, Kanjuri, Ndumanu, Giakaibei and Ihwagi, all in Mathira East.

“People spend daytime away from their homes fearing their creditors. Marriages are likely to break as a result,” Kimaru says.