Credit Bank is facing sharp criticism after claims emerged that it is forcefully taking over land in Loresho despite a High Court order forbidding any sale, transfer, or occupation of the property.
The landowners accuse the bank of colluding with land registry officials to alter records and push through illegal changes.
Witnesses say security guards linked to the bank have been blocking access to the land and acting as though the property already belongs to the institution.
This comes even though court documents reportedly show that a restraining order was issued to stop any change of ownership or use of the land, yet those directives appear to have been openly ignored.
The dispute raises serious concerns about the rule of law in property ownership and the influence of financial institutions. Many are now questioning how a bank can sidestep a court order with such confidence and continue to occupy land under dispute.
The issue has become even more controversial because it ties into deeper financial troubles facing Credit Bank.
Reports indicate that the bank is under-capitalised and struggling to meet statutory requirements.
Recent audits suggest its core capital stands at about KSh 1.3 billion, far below the minimum KSh 3 billion that is required by the end of 2025 under the Business Laws Act.
Its liquidity ratio is also said to be at 15.1%, which is significantly below the 20% that is mandatory.
Even more troubling is the state of the bank’s loan book. Industry sources suggest that around 60% of its loans are non-performing, meaning three out of every five borrowers have failed to pay back.
If accurate, this is one of the worst delinquency ratios in the sector. Experts argue that these numbers suggest either reckless lending or outright mismanagement.
There are questions about whether insiders may have received unsecured or favorable loans, whether collateral values were inflated, and whether the bank ignored key governance rules.
The Loresho case highlights how financial stress may be pushing the bank into aggressive asset seizures.
Credit Bank recently announced it would be trying to recover liquidity by completing stalled projects and selling collateral more forcefully.
Analysts suggest this strategy may explain its actions in Loresho. However, by moving against a High Court order, the bank is not only inviting legal battles but also risking further collapse of public trust.
This paints a worrying picture where under-capitalised banks may be tempted to take shortcuts rather than addressing governance failures or restructuring their businesses.
The bigger concern is what this means for Kenya’s wider financial sector. Several mid-sized lenders are known to be struggling with low capital and rising non-performing loans.
If Credit Bank’s aggressive actions are a sign of how institutions will try to survive, then more disputes could erupt between banks and borrowers.
The families in Loresho say they are fighting to protect land that rightfully belongs to them, but beyond their battle lies a bigger test. Kenya’s courts, regulators, and enforcement agencies must show whether they can protect property rights and enforce judicial orders against institutions that appear willing to gamble with legality in order to stay afloat.
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