13 January 2013

Tanzania: Bank Drags Dar Lawyer to Court Over Unpaid Loan

THE African Banking Corporation Tanzania Limited has sued Advocate Ahmed Said El-Maamry, demanding payment of 11,376,590/-, comprising principal amount provided as a loan to him in 2011 and interests accrued thereafter.

The suit is before Resident Magistrate Sundi Fimbo at the Kisutu Resident Magistrate's Court in Dar es Salaam and has been set for mention on January 15, this year. It is alleged that on June 28, 2011, Ahmed, who had worked at the bank as legal officer between 2003 and 2006, applied for a personal loan of 10m/-.

His application was accompanied by a letter from his father who is a senior advocate, Mr Said El-Maamry. On July 11, 2011, the bank extended the loan on agreement that the defendant (Ahmed) would repay the facility in 36 monthly instalments including an interest of 19.5 per cent per annum.

However, despite several verbal and written demands, the defendant persistently failed to repay the loan instalments when they fell due, contrary to the loan agreement. In his written statement of defence, El-Maamry junior admitted to have obtained the loan in question, saying "the personal loan was for the purpose of completing residential apartments in Mbezi Beach in the city."

He further admitted that his loan application was accompanied by a letter of his father meant for reference as to where he was working and the same had not served as a guarantee to the loan facility. Furthermore, he admitted that the bank had extended the loan on his good conduct.

But in his defence, Ahmed denied the allegations that he persistently failed to repay the loan instalments. He stated that he had raised an issue with the bank's credit manager that the costs of building materials was higher than previously anticipated, hence there was need to enhance the facility.

"The defendant further invited the bank to visit the project site and offered as security for the entire loan. The bank refused to the proposition and persistently demanded the repayments thereof without considering the purpose and or nature of the loan,' reads part of defence.

He stated that the initial purpose of the loan was to complete two residential apartments that were already in final stages and that the expected rentals were supposed to service the loan thereof.

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