Now auctioneers’ hammer ends dreams of transport investors as bad loans soar

Now auctioneers’ hammer ends dreams of transport investors as bad loans soar

The old, rickety, yellow mini-bus squeaked noisily throughout the one-and-a-half hours’ journey from the Standard Gauge Railway (SGR) station at Miritini, Mombasa County to Diani, Kwale County.

On close examination of the vehicle, I noticed that it had the initials TSV (Tourist Service Vehicle) and not PSV (Public Service Vehicle).

My colleague and I had enlisted the services of the van driver during a recent family vacation to the Coast where we came face to face with the harsh reality of the full impact of Covid-19 on the tourism and transport sectors in the country.

The owner of the vehicle can, however, count himself lucky to still be able to make a living, albeit outside his usual line of business, with tens of thousands of other players in the tour travel business being forced to shut down completely. Read More

With the inflow of foreign tourists reducing to a trickle due to prohibitions on international travel, a lot of tour operators slid into bankruptcy. And those with loans had difficulty servicing them.

Data from the Central Bank of Kenya (CBK) shows that bad loans in the wider transport sector increased by Sh6.4 billion at the height of the pandemic following the restrictions of movement into five counties last year.

Non-performing loans (NPLs) – loans that have not been paid for more than three months – by the transport and communication sector increased by over a third to Sh27.5 billion in the three months to September last year.

“The transport and communication sector registered the highest increase in NPLs of 30.4 per cent (Sh6.4 billion) mainly attributed to the restrictions in movements across certain regions as a result of the Covid-19 pandemic,” said CBK, the financial regulator, in a statement.

Earlier in the months of May and June, our driver and many others who eked out a living transporting passengers disembarking from the SGR train to their final destinations were rendered jobless.

This is after President Uhuru Kenyatta prohibited the movement of people into and out of four counties – Mombasa, Kwale, Kilifi and Nairobi.

The ordinance affected the operations of the SGR as well. Since it started operating some four years ago, Kenya Railways Managing Director Philip Mainga once told this reporter that Madaraka Express had never delayed even for a minute.But for two months following the outbreak of the deadly coronavirus in the country in March last year, the train service was grounded altogether.Over 200,000 passengers who […]

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