KITALE, KENYA: A teacher from Trans Nzoia County is in deep agony, thanks to money he borrowed from a bank to improve the welfare of his family.
John Manyara says he borrowed Sh1.2 million from the bank in August 2011. He was supposed to repay the loan over six years, meaning he would have finished repaying this August.
Mr Manyara tells The Public Eye that he has faithfully paid back the debt at a monthly rate of Sh26,031.
By May 2016, the loan balance on his payslip read 468,558 and the Makunda Primary School teacher was looking forward to clearing his loan in August. But that was never to be.
“In June 2016, Equity Bank increased the loan balance on my payslip to Sh1.18 million from Sh468,558. By that time, I had already repaid my loan for 57 months, which translates to 1,405,674. That means Sh711,442 was extra on my loan balance as at June 2016 after that erroneous addition,” says Manyara.
Taken aback, the teacher asked his employer, Teachers Service Commission (TSC), to explain why his loan had ballooned without warning. TSC referred him to Equity Bank’s Kitale branch.
“The branch manager told me they had instructed TSC to effect the changes on my payslip because of inflation that happened in November 2011,” he says.
He asked the bank why he was not informed when the said inflation occurred so as to prepare himself but “they kept silent”.
“I also asked them why they never effected the changes at that time (2011) and they kept silent.”
Later, the bank wrote to him stating that his “real balance was Sh760,000 but due to interest, it was now Sh1.17 million”.
At that time, President Uhuru Kenyatta had signed the Bill on capping of interest rates.
“If you calculate, Sh760,000 at 14 per cent for 3.5 years, this will not give you Sh1.17 million. I did the calculation – Sh760,000 at 14 per cent interest for 3.5 years – and got Sh910,00.
“If you subtract Sh910,000 from Sh1,170,000 it will give you Sh260,000 above the 14 per cent capped rate. That means even after adding the extra Sh711,442, they did not consider the new rates.”
Manyara accuses the bank of causing him problems on the family front, in addition to the pain it has inflicted on his pocket. He mourns that his wife of many years packed her bags and left him last year after accusing him of squandering money.
“She suspected I had another wife on the side. She thought I was taking all my money to another woman and could not believe that the bank was behind my financial woes,” he said.
I also deferred my education due to financial constraints but they (the bank) still do not respond to my questions. Please help me, I am really in trouble,” says the teacher who, going by the new arrangement, will finish repaying the money in December 1919.
Can Equity Bank explain to this teacher, their customer, through The Public Eye, exactly how the new amount was arrived at and why? Who knows, this could be enough to convince his runway wife to return home.
Manyara’s can be reached on [email protected]