Kamuthi Housing society risks losing property worth over Sh4bn over debt
Members of Kamuthi House Cooperative Society during the stormy AGM at Maziwa on May 7, 2016. The society risks losing property worth over Sh4 billion due to more than half a billion shillings unpaid loans it took from two banks to acquire land in Kiambu and Murang’a counties. PHOTO | ERIC WAINAINA | NATION MEDIA GROUP
What you need to know:
- With the loan from Sidian, the society bought a 1,233-acre piece of land in Thika and acquired 400 acres in Murang’a with the money from Coop Bank.
- Mr Maina said they have been unable to service the loans because the society has not been making sales in their projects.
- Mr John Mwangi of Sidian Bank said they might be forced to take over the Thika project to recover their money.
- The society was required to raise Sh4.7 million by Monday to save the situation.
Kamuthi Housing Cooperative Society risks losing property worth over Sh4 billion due to more than half a billion shillings unpaid loans it took from two banks to acquire land in Kiambu and Murang’a counties.
The banks have issued the society with notices saying they might be forced to attach its multi-billion projects dubbed Buffalo Hills and Golf Village in Thika and Soya estate in Murang’a to recover the money.
The 7,000-member society, according to a report by its chairman Mr Bernard Maina, owes Sidian and Cooperative banks Sh292 million and Sh401 million respectively.
With the loan from Sidian, the society bought a 1,233-acre piece of land in Thika and acquired 400 acres in Murang’a with the money from Coop Bank.
Mr John Mwangi, the Sidian Bank Thika branch manager told members during a stormy meeting on Saturday that the loan was in arrears and unless the money is paid, they might be forced to take over the Thika project to recover their money.
MONTHLY PAYMENTS
“We do not have the advantage of time,” he said of the loan whose monthly payments is approximately Sh7.5 million, and already has arrears of Sh7.2 million.
The Cooperative Bank loan has a monthly payment of Sh6.4 million.
The society was required to raise Sh4.7 million by Monday to save the situation, failure to which they will face serious repercussions from the bank within the next 21 days.
Mr Maina said they have been unable to service the loans because the society has not been making sales in their projects, noting that the Buffalo project holds Sh1.8 billion in unsold plots.
“The roads to the projects are horrible, and this has discouraged our potential clients,” he said.
Ms Peninah Njenga, a member asked: “Why did the office decide to buy another land in Murang’a yet we had not completed even paying for the Thika project?”
Whatever is happening paints a picture of a failed office and the confidence and trust that we had with the management has died,” Ms Njenga added.
The committee proposed that the society disposes 108 acres at the Buffalo projects which had been set aside for the construction of a golf course and a club house, but the buyer will be required to put up the same projects.
