Popular Kenyan university forced to sell part of its campus to settle bank loan
Kemu will be selling the iconic Kemu hub to clear a Sh1.7 billion loan from Cooperative bank, as well as meet other financial commitments which include tax arrears and staff dues.
The university had used the Kemu building as security for the Sh1.7 billion long-term loan - and has now sought permission from Cooperative bank to sell it as part of efforts to clear the loan, pay salaries, and settle debts owed to suppliers.
“Upon the sale of this property it is our proposal that we utilise part of the proceeds to clear Sh135 million the Co-operative Bank advanced KeMU in June 2017 and the balance to pay accrued amounts owed to Kenya Revenue Authority, part time lecturers, staff deductions and other creditors."
“In the event the value of the latter (tower) is not adequate to cover the loan, additional security will be provided to enable the release of KeMu Hub for sale,” Kemu Vice Chancellor Prof Maurice Oduor Okoth stated in a letter to Cooperative Bank.
The move comes a few months after the Ministry of Education threatened to shut down the university due to its financial instability.
Private universities have in the past two years suffered from low student enrolment as part of the reforms carried out by then Education CS Fred Matiang'i.
JOIN OUR PULSE COMMUNITY!
Eyewitness? Submit your stories now via social or: