Shylock business is a rip-off

Walking around Odeon Cinema in Nairobi, you can’t miss the signposts: Instant Loans on Items. Here, you submit an electrical appliance for a loan and then sign a contract. Breaching the contract means you lose the item and you cannot claim it once the repayment deadline has passed.

Shylocks, who are basically loan sharks, bank on the sanctity of a contract law that a borrower signs. These contracts are worded to act as a snare to the borrowers who usually misinterpret them. Most end up failing to meet the deadline and their items get auctioned.

The popularity of Shylock dens in Nairobi is usually fueled by lengthy and tiring procedures in obtaining loan from mainstream financial institutions.

From the horse’s mouth:

“I’ve been in Shylocking business for 5 years now and it’s thriving because people want instant cash and the prolonged bank processes make Kenyans avoid the financial institutions,” says Mr Makanyaga* who operates around Odeon Cinema in the capital Nairobi. “We give you cash against a product, preferably an electrical appliance. By looking at the item, I can tell the amount it will fetch in the market if one fails to comply with the contract.”

This acts as security, often for a shorter period typically seven days.

 “If you don’t repay the loan with the interest we can either negotiate you pay the interest first and I keep the item as you continue looking for money or I sell it,” adds Mr. Makanyaga*.

The risks:

Shylocking is not a bed of roses.

Sometimes the sharks have to deal with stolen items and this makes them prone to being sued in case they are caught. Besides, they may be given faulty or obsolete items and end up losing money since they cannot resell them.

While talking to Makanyaga*, a guy who looks drunk arrives and asks him for a Ksh500 loan. Taking his Samsung phone, Makanyaga* takes his contract note book and after scribbling something he counterchecks the phone and gives him the money. With a repayment period of seven days, the borrower is supposed to bring back Ksh650, a 30% interest. “That’s how we survive and we barely make losses,” he chuckles adding that he once gave someone Ksh50, 000 as a loan.

Eunny*, an accountant with a city-based company, is a frequent visitor to loan sharks’ dens. She says that when she has a pressing need, she turns to the Shylocks because they are the last option and getting money from them is easy. “Sometimes you find yourself in a fix; there is a pressing need and with a budgeted salary you have to turn to the Shylocks to meet this emergent need,” She volunteers to tell.

 “When you know there is a place you can get easy cash, you become addicted to it. Although the interest is high and the initiative makes people lazy, you are left with no choice.” Eunny*, like many urban dwellers, have resigned to this kind of rip-off.

Eunny was introduced to the Shylocking business in 2014 by her then workmate and she has created a rapport with the sharks since she is a regular borrower. “When you become a regular customer you create a mutual understanding with the lender and he may decide to scrap off some money when you don’t default; that way the loan burden becomes less.”

Because they are unregulated, Shylocks take advantage of gullible Kenyans and weave the contract in a way that sets the borrower to default so that they can sell the mortgaged item at a higher price than the loan. This is how they thrive.

Professional opinion;

The government should legalize shylocking in Kenya because the aim is to help a needy Kenyan at a fee. There is need to draft laws that can regulate the business so that they can start competing with the regulated financial institutions.

Only this way will there be sanity and benefit for the government. Otherwise, this is a rip-off to struggling entrepreneurs and businesses.

I can’t even talk about virtual money lenders like Tala, Branch, M-shwari and the like!

Making a case for youthful Agriculture

For a while now I’ve wondered about the future of agriculture in Kenya. It has been the Country’s predominant sector since the early days of independence, and even though a lot of activities are undertaken, the potential for growth still remains. Question is; are Kenyans willing to take up that charge? Or more specifically, are Kenya’s youth willing to do so?

One of the typical composition questions featured in English debates in primary schools when I was younger was: “The Farmer and the Doctor: Who Is More Important?” I always grappled with that question, but more often than not, it came down to the farmer. Why? Because basic human instinct seeks nourishment before other needs or wants. Maslow’s theory confirms this, and it’s also true in our everyday lives. 

Also, when you think about traditional African societies, medical practitioners (herbalists) relied on plants (grown by farmers) to treat their patients. So it would seem like the presence of the farmer with his food and plants for medicine gave birth to the doctor. In essence,

Either ways, I’m not here to argue about whether the doctor or the farmer is more important.

If my guess is right, thousands of school children are still contemplating that question in their essays. What I’d like to talk about though, is the youth’s perception of agriculture.

Thanks to globalization and western influence, many African youth look down upon careers in agriculture. Particularly with regards to farming and fishing! They think it’s beneath them. Let me correct myself. Since I’m also an African youth, we, as a collective, think it’s beneath us. This is really incredulous! How can an honorable trade such as farming, that essentially offers the opportunity of life and health, be a second-thought or second-class career option?

And it’s not just the youth who think this way. Adults do too. Many parents will say, “oh my daughter/son is going to grow up to be a medical doctor, lawyer, or teacher.” Very few say “my child will be a farmer or fisher when he/she grows.” Why is this the case? We seriously need to think about this. Especially since our main economic strengths lie in agriculture. If we ever want to advance into strong manufacturing and services sectors, we’re gonna need to fill up our breadbaskets to the brim and have extra in storage.

The agricultural sector needs us. Without the human resource base in that sector, we’re basically screwed. We’re letting our key strengths go to waste, and in addition to that, we’re paying a dear price for it by having to import food we can grow ourselves and dealing with food shortages and crises.

Food security is the essential ingredient to keeping humanity afloat. A hungry (wo)man is an angry (wo)man. And when Otieno, Kemboi, Wafula, Mumbua or Habib are angry, nobody else is happy. When you’re hungry, you’re not only irritable; you can’t concentrate until you get something in your system.

The great news is that in this era of technological advancement, there are many sexy agricultural jobs out there. Yep, you heard right. We need to change our idea about what agriculture entails because there are so many components to it. For instance, If you feel like you don’t have the muscles necessary to till the soil, you can concentrate on helping design and invent new technologies to make that process easier.

Not convinced yet? Okay. Let’s say you’re more interested in legal structures. You can do research and evaluate current labor laws governing the agricultural sector – both at the local and international levels (within the framework of the WTO for instance).

Figure yourself as more of a business person? No worries. You can help develop and implement marketing schemes to help farmers get as much profit as their hard work deserves.

Interested in climate change? You can help develop new, ‘green’ initiatives to keep the agricultural sector, well, green. And for those of us who think women are no good as farmers, think again. Women contribute the most to the subsistence agricultural sector in many African and developing nations.

At the end of the day, it all comes down to perception. If your window of perception about agriculture is limited to days under the sun toiling for hours on end, then you’ve got another thing coming to you.

We’re in a new era with new possibilities. And even if you do end up sweaty and panting under the tropical sun in a field of crop, is that so bad? You would be participating in one of the most honorable trades (in my opinion) out there, and you’d be contributing more than your quota to humanity. Think about it. It’s time to make agriculture sexy.