INTERNATIONAL - The Nairobi car auctioneer hopefully scanned empty rows of rickety plastic chairs in a dusty lot for more bids, but saw only too many vehicles and not enough buyers, an increasing problem as Kenya’s economy slows and repossessions pick up.
A severe drought earlier this year, a bank lending slowdown and prolonged political uncertainty are creating a growing pool of distressed borrowers whose assets are being seized by newly aggressive lenders in the east African powerhouse.
George Muiruri, managing director of Leakey’s auctioneers, says they are holding 10 auctions a month, up from about four a year ago.
“Things are tight,” Muiruri said as he prepared to auction vehicles ranging from luxury cars to battered workhorses once owned by painstakingly-built small businesses.
“Because of this political environment, people are postponing so many plans,” he said. But he added: “You find that you repossess and then there are no buyers.”
Kenya’s free market credentials, staunch alliances with Western nations and relative stability in a region roiled by conflict has made it the richest economy in East Africa and a favoured regional headquarters for global firms like Google, IBM and General Electric.