Move to weed out predatory lenders and creditors harassing Kenyans launched
By Nancy Marende, September 23, 2025The National Assembly has been petitioned to amend the Consumer Protection Act, Cap 501, to strengthen safeguards that prevent borrowers from paying interest that exceeds the original loan principal.
Speaker of the National Assembly Moses Wetang’ula, on Tuesday, September 23, 2025, informed Members of Parliament of a petition filed by Senior Counsel Allen Waiaki Kishore of Mwai & Allen Advocates.
The petitioner called for the codification of the in duplum rule into the law to curb exploitative lending practices.
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Section 44A of the Banking Act already provides for the in duplum rule, which states that “interest on a loan ceases to accrue once it equals the outstanding principal amount when a loan becomes non-performing.”
However, Kishore argued that, in practice, borrowers continue to be subjected to excessive interest, penalties, and other charges beyond the principal amount.
“The petitioner avers that the purpose of the rule is to protect borrowers from exploitation, prevent endless accumulation of interest, and encourage fair lending practices,” Speaker Wetang’ula told MPs.
The petition also highlighted harassment by debt collectors, inconsistent judicial interpretations on when the rule applies, whether before or after loan restructuring ,and disputes over whether penalties and default charges should be considered interest.
According to Kishore, this lack of clarity undermines public confidence in the financial sector and violates the constitutional rights of consumers under Article 46, as well as the national values of transparency, accountability, and social justice under Article 10.
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Furthermore, the petition urges the National Assembly to clarify the scope of the in duplum rule, establish uniform mechanisms for debt restructuring and recovery, and establish redress mechanisms for borrowers who have suffered unlawful charges, including refunds or settlements.
Omboko Milemba welcomed the petition, urging Parliament to expand reforms to encompass the increasing number of unregulated lenders.
“Banks and other institutions remain very harsh on borrowers, but we also see mushrooming small finance outfits and digital lenders who exploit Kenyans without proper regulation,” he said.
The Speaker confirmed that the matter falls within the House’s mandate and referred it to the Public Petitions Committee for consideration in accordance with Standing Orders.