Debts and Dodges
Debts and Dodges
The Moral and the Hazard in Repayment
This chapter focuses on loan repayment under the IADP–SPSCP, suggesting how Luo farmers felt about it. It discusses that IADP–SPSCP loans went mostly unrepaid. Scarcely over twenty percent was returned to government coffers altogether by the time the credit schemes were shut down, although the details varied somewhat by subproject, and although inconsistent bookkeeping in the cooperatives left some doubts about the exact percentages. The later the loans, the fewer farmers repaid. Proportions of borrowers who repaid nothing at all rose steadily. Early defaulters set examples for neighbors, who decided they too could at least postpone repayment with impunity. The chapter reveals that under World Bank arm twisting and with perhaps some impetus of its own, the Kenyan government recruited the Provincial Administration and its chiefs, along with new cooperative field assistants, to pursue debtors.
Keywords: loan repayment, Luo farmers, credit schemes, bookkeeping, borrowers
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