Down the drain: Auctioneers harass traders over unpaid loans

Maryanne (name withheld) secured a tender to supply office stationery and computers in Bungoma county two years ago under the youth category. Being a first-timer, she went for a bank loan of Sh1.5 million and made the supplies, hoping to get paid in a month’s time, repay the loan and then walk away with Sh700,000 as profit.

“After being awarded the tender, I delivered the supplies within 10 days but trouble started when it came to processing payments. By the time all the documents were signed, two months had passed and that only happened after parting with Sh50,000,” said Ms Atieno.

She added: “I started following up on my payments and anytime I went to the finance office to ask for my money, I would be told that the national government had not disbursed money to the county. But what shocked me is that some established contractors in the county would be paid promptly even a week after making deliveries.”

Maryanne pleaded with her father to save her from being auctioned after defaulting on loan repayment as earlier agreed with the bank. They sold a piece of land to offset the loan. She is still waiting for the day the county will pay her. 

She is an example of many suppliers who have undergone financial distress after supplying goods and services to counties but have not been paid. Some have auctioned their properties while having their businesses collapse after selling them out to repay the expensive bank loans.

Bungoma Governor Ken Lusaka, said that he inherited pending bills of more than Sh1 billion from the previous regime, saying he formed a task force to carry out an audit to weed out ghost workers.

• .

  Keep Reading

• 
  Shrinking incomes lock more Kenyans out of mortgages
• 
  Busia plane crash: How a 50-word fax message cost taxpayers Sh2.6b
• 
  How banks gauge small businesses
• 
  What home buyers must know before getting a mortgage

Lusaka said only genuine contractors and suppliers who followed the due process were going to get paid. “We carried out an audit just to make sure that the pending bills arise from genuine work that is done to completion. It was not a witch-hunt and after the audit was out, we discovered that only Sh439.977 million was eligible and Sh589.915 million was ineligible,” said Lusaka.

On flagship projects, there was Sh248.502 million as pending bills but after the audit, only Sh60.057 million was genuine and Sh188.445 million was found to be not genuine.

Vihiga Governor Wilber Ottichilo in his inaugural address to the third county assembly session, last year, said that they have at least Sh500 million in pending bills. “We inherited Sh2.8 billion in historical pending bills. We were directed by the treasury to have a payment plan for these bills from 2018 to date. We have to date paid Sh2.3 billion. We have a balance of at least Sh500 million,” said Ottichilo.