Kenya Development Corporation, a state-owned bank, is facing serious financial problems. A new report shows that many Kenyans are not paying back their loans to KDC, which means KDC might have trouble lending money to new customers in the future.
KDC was created in 2020 by combining three other companies. It offers loans and business advice to Kenyans. However, about 86% of KDC's loans are considered "non-recoverable." That's around 33.44 billion Kenyan shillings that people probably won't pay back.
KDC has had to stop adding interest to these unpaid loans. Some of the loans are really old, and KDC has even lost the documents for the property used to secure them. The bank has set aside money to cover these expected losses.
The report also mentions that KDC is struggling to sell some apartments it built. It still has 35 unsold units, even though some were finished back in 2015. KDC has to pay 10,000 shillings per month to manage each empty apartment.
These issues could make it tough for KDC to keep giving out new loans and helping Kenyan businesses grow. The bank will need to find ways to get people to pay back what they owe and sell its empty apartments. If not, KDC's future could be in jeopardy.
KDC was created in 2020 by combining three other companies. It offers loans and business advice to Kenyans. However, about 86% of KDC's loans are considered "non-recoverable." That's around 33.44 billion Kenyan shillings that people probably won't pay back.
KDC has had to stop adding interest to these unpaid loans. Some of the loans are really old, and KDC has even lost the documents for the property used to secure them. The bank has set aside money to cover these expected losses.
The report also mentions that KDC is struggling to sell some apartments it built. It still has 35 unsold units, even though some were finished back in 2015. KDC has to pay 10,000 shillings per month to manage each empty apartment.
These issues could make it tough for KDC to keep giving out new loans and helping Kenyan businesses grow. The bank will need to find ways to get people to pay back what they owe and sell its empty apartments. If not, KDC's future could be in jeopardy.
