Mwananchi Credit Responds to Claims of Firing Workers Under Check-Off Loan Department
- Mwananchi Credit Limited announced plans to restructure its check-off loan business, leading to a reshuffling of employees
- Reports doing rounds online claimed that the microfinance bank fired massive staff following the decision
- However, the company reacted to the reports, noting that it has not fired any workers, but the department staff can still be absorbed
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Employees of microfinance firm Mwananchi Credit Limited will not be fired after the lender reviewed its business.
Source: Twitter
Mwananchi Credit dismissed reports that it fired workers under its check-off loan department.
The company said it is streamlining its business operations to offer customers the best financial services.
According to an internal memo seen by TUKO.co.ke, the lender said after discontinuing the check-off department, it gave staff a chance to reapply for their jobs, whose interviews are scheduled for April 2025.
“Despite concerted efforts to enhance collections and strengthen financial accountability, the product has continued to underperform. Several team leaders have not met the expected targets, resulting in significant financial losses," a memo dated March 25, 2025, from Human Resource Manager Collins Okello read in part.
Why Mwananchi Credit is restructuring business
The memo said it resorted to restructuring the business after a series of high-level discussions, the first of which took place on February 25, 2025.
The discussions raised key concerns about loan collections, non-performing loans, and commission structures.
"Despite efforts to enhance financial accountability and improve collections, the checkoff loan product continued to underperform, resulting in substantial financial setbacks for the company," the memo continued in part.
Source: Facebook
Mwananchi Credit acknowledged the contributions of employees who have worked within the checkoff loan department and assured them of support during this transition period.
Which loan products are offered by Mwananchi Credit
The firm is best known for its logbook loans, which allow vehicle owners to use their logbooks as collateral in exchange for quick financing.
It also offers salary check-off loans, a facility widely used by government employees such as teachers, police officers, and other civil servants.
The company’s decision highlights a growing challenge within the financial sector, where non-performing loans and inefficiencies in collection strategies have forced companies to rethink their credit offerings.
Non-performing loans
According to the Kenya Bankers Association (KBA), elevated non-performing loan (NPL) ratios continue to constrain credit growth
This continued to affect many lenders, as a result of reduced borrowing from Kenyans and the private sector.
The drop in credit to the private sector has indicated a decline in economic growth; The Kenya National Bureau of Statistics (KNBS) estimated that the real GDP growth stood at 4.00% in the third quarter compared to 4.6% in the second quarter of 2024.
In February 2025, the Central Bank of Kenya reported that NPL ratio decreased to 16.4% compared to the past four months, urging lenders to lower their interest rates.
Proofreading by Jackson Otukho, copy editor at TUKO.co.ke.
Source: TUKO.co.ke
