MPs are investigating 110 complaints against lenders accused of charging borrowers’ interest that exceeds the original loan amount, with some cases involving payments of up to four times the principal.
The National Assembly Finance and National Planning Committee will summon asset finance companies accused of imposing excessive interest charges on customers, amid growing concerns over lending practices in Kenya’s credit market.
Committee chairperson Kimani Kuria said lawmakers had received 110 cases involving alleged predatory lending, including complaints of borrowers paying two to four times the original loan amount without clear disclosure of the terms of credit.
The committee has scheduled November 5th to hear from the lenders implicated in a petition filed by several boda boda riders.
“We have continuously, since the start of this inquiry, received numerous other complaints where there is no disclosure of the loan amount, and some customers have paid even three or four times the loan amount,” Kuria said.
He warned that failure to honour the November invitation could force the committee to invoke Standing Order 191 of the National Assembly to issue formal summons.
The inquiry comes amid concerns over the enforcement of lending rules introduced under the Business Laws (Amendment) Act, 2024, which brought previously unregulated non-deposit-taking credit providers under the Central Bank of Kenya’s regulatory oversight.
Kuria said the law was intended to strengthen oversight of non-bank lenders and curb practices that leave borrowers trapped in expensive credit arrangements.
One of the principles he cited was the in-duplum rule, which limits the interest recoverable on qualifying non-performing loans to the outstanding principal amount when the loan becomes non-performing.
Despite the regulatory changes, the committee says it continues to receive complaints of interest charges that substantially exceed the original amounts borrowed.
Beyond excessive interest, lawmakers are also examining alleged failures by lenders to disclose loan amounts and terms adequately, as well as repossession of financed assets without proper notice or adherence to the required procedures.
These practices could expose borrowers to mounting repayment obligations and the loss of assets acquired through financing arrangements.
Asset financing is widely used by small businesses and informal-sector workers, including motorcycle operators, to acquire income-generating equipment and vehicles. The cost and terms of such credit can therefore have a direct bearing on borrowers’ earnings and ability to repay their loans.
Kuria said the committee intends to complete its inquiry and table a report before the House, paving the way for appropriate legal or regulatory action where violations are established.
“No lender should be allowed in Kenya to lend beyond or outside the legal framework,” he said.
In July 2026, Competition Authority of Kenya warned that gaps in the legal framework governing digital lenders are exposing borrowers to hidden fees, predatory lending and coercive debt recovery practices.
The watchdog said weaknesses in regulation and supervision of credit-only lenders have left consumers vulnerable to undisclosed charges, misleading loan terms and arbitrary asset seizures.
