ABC Bank has turned to guarantors in a bid to recover a Sh36 million loan issued to an LPG distribution firm that defaulted on repayment.
The lender has filed a suit seeking to compel the guarantors to settle the outstanding debt, after the borrowing company failed to meet its financial obligations.
Court documents show the bank issued the loan under agreed terms, but repayment lapsed, prompting recovery action.
The guarantors, who had signed personal guarantees for the facility, are now being pursued for full settlement of the outstanding amount.
ABC Bank argues that the guarantees were legally binding and enforceable, and that the bank exhausted all other avenues before initiating legal action.
The move highlights rising credit risk concerns in Kenya’s SME lending sector, where lenders increasingly rely on personal guarantees to secure facilities.
Written By Ian Maleve
