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Auctioneers accuse banks of invading their turf, deny profiting from Covid

FINANCIAL STANDARD
By Graham Kajilwa | May 17th 2022 | 3 min read
By Graham Kajilwa | May 17th 2022
FINANCIAL STANDARD

Auctioneers are yet to recover from the impact of Covid-19 and the infiltration of the business by unlicensed operators.

At a conference in Nairobi last week, auctioneers accused banks of taking over their business by offering bids on repossessed properties. The meeting also found that some online vendors are offering bids to customers yet they are not licensed as auctioneers.

Herman Kasili, a member of the Auctioneers Licensing Board where he represents the Kenya National Chamber of Commerce and Industry (KNCCI), said some banks are infiltrating their turf, denying them their commission.

“When an auctioneer has repossessed a car or some property, they (banks) force the auctioneer to give the car to the bank and the bank makes a bid, which is illegal,” he said. Rev Kasili said auctioneers deserve a commission when they repossess property for the banks.

“Auctioneers are not getting their fees because the banks are taking away the cars,” he added. “They are not supposed to sell them without involving auctioneers.” Rev Kisili also noted that some unlicensed individuals have been conducting auctions online. “It is illegal and as the board, we will be tough on them,” he said.

“Auctioneers are losing a lot of business because of banks and some online goons. As an auctioneering fraternity, we are going to follow it up. The board is categorical: if someone is not licensed, they are not supposed to ply the trade out there,” added Rev Kisili.

Friday’s conference was the first in three years due to the Covid-19 pandemic, which participants lamented had impacted their business negatively.

“We have a lot of properties, but there are no takers. There is that assumption that when the economy is doing badly or when there is such an epidemic, it is the auctioneers who benefit,” said Kenya National Society of Professional Auctioneers (Kensap) chairman George Mbagu.

They fear the August 9 polls could further dim hopes of recovery.  According to the Central Bank of Kenya (CBK) Credit Survey Report for the quarter ended March 2021, the sectors with the highest non-performing loans (NPLs) were personal and households, real estate, transport and communication, tourism and trade. “The increase in NPLs was mainly due to a challenging business environment as a result of the Covid-19 pandemic,” says the report.

National Association of Kenya Auctioneers (Naka) chairman Dennis Kirui said when the economy is depressed, it affects all sectors, including theirs.

“We do not have a booming business when the economy is low,” he said, debunking the myth that since their work revolves around the repossession of properties due to defaulting on loans, they could be thriving. Considering that the pandemic caused job cuts and closure or downsizing of businesses, leading to loan defaults, the association says it is not automatic that they made more money. “When the cash flow is very low, we recover goods on behalf of our principals who are banks and probably creditors or judgement debtors, and we have to sell to realise the judgement passed or debt not paid,” said Mr Kirui. 

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