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How Loan Repayments Increase to Psychologically Stress your Life

How Loan Repayments Increase to Psychologically Stress your Life

How Loan Repayments Increase to Psychologically Stress your Life


It all starts when you actually take out the easy Mpesa loan, bank loan, a credit agreement or contract with another “loan shark” not forgetting the new trend of buy now pay later deals in Kenya. Money is created by the bank as debt, in the event that you miss a payment be assured this will result in a negative impact on your credit file with the Credit Reference Bureau (CRB) in Kenya.

You should always remember as soon as you miss a loan repayment, your credit file is already ruined.


When you fail to pay for your Mpesa loan or bank loan for 90 days, in most cases your loan will be transferred to the lenders or bank arrears team. Call it “psychological warfare”, these guys are trained to raise your stress levels to the point you regret taking the loan in the first place. They will put so much pressure to try and ensure you pay the loan.

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This may start with phone calls that are not so friendly and possibly reminder sms or letters that are so extreme. For silly loans like car loans they may even threaten to switch off the car engine while you are driving and threaten to come for it.

It’s a well-choreographed script to put as much pressure on you as possible from the banks wholly owned subsidiaries used for the purpose of debt regulation and recovery.


After six months of failing to pay, the loan moves into default and is added into a bundle with other unpaid debts and sold off cheap. Every year the bank will have a clear-out, selling the bundle of debt to recovery firms.

The main reason for selling your loan to recovery firms is because every bank has some sort of calculations on the man hours they can dedicate to a debt before they get anything back.

Note that for the bank writing the amount they have sold your loan on their balance sheet is better than having a lesser amount balance sheet.


The debt recovery firm will now chase the full payment and interest, which acts as profit if they can recover it. At this point you are most likely to feel like you are at war. They will really step up the psychological warfare, with an aim of getting the full loan payment and interest.

Depending on your situation they may also drop down the amount, as if they’re doing you a favour, to get what they can. This is mostly likely something to do with the value of your loan at that particular point. It’s like if you bought a car today on sale from Tsusho Capital and it costs 1 Million but it’s down to 800k. If you go back in a week later and tell Tsusho Capital you don’t like it and would like to be paid back 1 Million am sure they will laugh at you.

So before you take a loan make sure you read “5 Questions to ask yourself before you take a Loan“.

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