Evening is fast approaching and I am about to wind up my day’s work at Micro Kenya, Kawangware branch office where I am stationed doing a spot check on MYC4 borrowers’ files. The loan officers jet in one by one after a hard day’s work in the field doing loan appraisals, checking on clients and attending group meetings. When the officers regroup in the evening, one of their activities is to report on delinquent borrowers and plan on doing recoveries of the same. As they go about their business, I can’t help but notice that doing loan recoveries is sometimes a dreaded exercise especially among the ladies. Occasionally the loan officers need some back up from their colleagues as the recovery may sometimes go sour, putting you at risk of harm. What makes the recovery process risky is that a good number of the borrowers are slum dwellers and in the slums there is usually some kind of bond among the residents such that if one of them cries out for some help, the response is usually overwhelming and perceived intruders are quickly repulsed by any means. This is further complicated by the fact that household goods are mostly the assets pledged to offset the debt in case of a default. However, there is still a good number of defaulting borrowers who commit to pay or their spouses commit on their behalf and the assets pledged are thus spared at least for the time being as was the case in this recovery trip.
Jobes, the branch manager at Kawangware, offered to share with me some of the dramatic experiences he had doing recoveries when he was a budding loan officer. In one of the instances, he had to do a recovery from this borrower who happened to be a witchdoctor. His colleagues had persistently tried all means to get him to pay or recover his pledged assets but it always ended up being a futile exercise. Indeed, this was not an ordinary client; he was the village witchdoctor somewhere in the rural setting of Sirare, Kuria County, Kenya. Witchdoctors are respected and albeit feared among the communities they live and operate in. Some perceive them as demi-gods who possess supernatural powers to heal, settle individual disputes and make one’s “troubles” go away. On the other hand they are equally revered to have the potent of unleashing evil on individuals who they disapprove or do anything against their wishes. It is from these perceptions that the loan officers from this particular lending institution were unable to effectively collect their arrears from the witchdoctor.
Despite him being new in the institution, Jobes took it upon himself to do the recovery. No amount of evil or witchcraft could stop him, he had heard enough of the tell tales. The next dawn, he woke up early and marched by himself to the witchdoctor’s home. He was surprised to see a long queue of “patients” lining up the dusty road to the compound and finally ending up in a hut perched up in the compound. The loan officers that had gone there before were intimidated by first having to queue among the other “patients” in order to see the doctor. Jobes strode confidently into the “medication room”, ignoring the queue. He was ordered to sit on a three-legged stool that was usually used by the “patients” when medication is being administered to them. “Business looks good, seems you are getting a lot of money, all these patients”, Jobes kicked off the conversation. What transpired in the next 45 minutes is something he would not want to endure, the insults, the intimidation and uncertainty of dealing with a person who supposedly has supernatural powers. Eventually the witch doctor paid up the loan by giving maize to the group members to sell. After that they become good friends which made his work easier in collecting defaults in the area due to his perceived association with the feared witchdoctor.
Another instance was when he was accompanied by a colleague to do a recovery on an old man who had repeatedly failed to honor his commitments. They found the man busy working on his farm and he came out to greet them; machete in hand. This did not raise any alarm at first but as they were deliberating on how to recover the arrears, the machete soon became a pointing device. They disagreed on the debt settlement and no sooner had his colleague tried to open the cowshed in order to take out the cow, than a war cry rent the quiet calm atmosphere, the machete just missed Jobes’ ear by inches as the man chased the loan officers away from his home. It was a run for their dear life; the man did mean real harm. Luckily they had discreetly recorded their chat with the client and they were able to file a statement with the police. The man was later apprehended for intent to cause bodily harm as well as forced to pay off his arrears.
All in all, the loan recovery process is crucial to the survival of any micro finance institution as they usually take on a portfolio that is riskier compared to conventional banks. The collateral involved in most of these loans is household chattels and group guarantee. This is the reason most micro finance portfolios are based on group lending rather than individual lending. Loan officers are the actual contacts with the borrowers themselves and they are depended upon to conduct a thorough appraisal of the prospective borrowers to avoid cases of delinquency as well as build good business relationships with them.