Housing Finance has come out to fight claims that its chief executive officer overruled his credit team to award loans that had earlier been declined. HF Group Chairman Steve Mainda said in a statement on Tuesday that its loan approval process is foolproof while dismissing allegations that its top executives awarded loans under unclear circumstances.
Responding to claims that HF Group Managing Director Frank Ireri overruled his employees and approved loan applications earlier declined, the chair said HFC Ltd, as a regulated entity, has very clear credit policies and an approval matrix approved by the board, which has always been followed to the letter.
Mainda said the approval matrix sets certain limits that apply to the Management Lending Committee, the Group Managing Director, the board credit committee and the full board.
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"Upon review of the cases specifically mentioned, we state that the board is fully satisfied that the approval matrix was and continues to be strictly adhered to," said Mainda. The lender said it has a well-documented policy on insider lending that see all required disclosures, both at the board level and to regulators done in all the matters highlighted.
"For avoidance of doubt, all the lending mentioned in the Sunday Standard newspaper was at arm's length, fully secured and with a clear business case," Mr Mainda said. "It is therefore not true, as alleged, that HFC intentionally misreported the non-performing loans position during the Rights Issue and state that this is actuated by malice and intended to serve other collateral purposes," added Mainda.
HF Group said the management lending committee of the company meets every two weeks to approve new credits and also to review the asset book and exit non-performing clients through recovery avenues open to the lender.
The group has confirmed that the consulting firm McKinsey was contracted by the board to assist in crafting the HF Group's five year strategy. The group, through its banking subsidiary HFC, has also embarked on a branch expansion plan in areas with high potential and with clientele who fit into their long-term strategic plan in support of HFC commercial banking strategy.
The new branches opened during the period are Komarock, Machakos, River Road, Hurlingham, Nanyuki and Ongata Rongai, which brings the total number of operational branches to 24.