Unlicensed digital lenders denied right to pursue unpaid loans

Court says that unlicensed lenders cannot recover debts arising from unlawful lending activities.

Photo credit: Pool

A Nairobi Small Claims Court has struck out two debt recovery suits filed because the digital lenders seeking the unpaid loans were not licensed by the Central Bank of Kenya (CBK), setting a precedent in tackling the non-performing loans.

Resident Magistrate Gladys Kiama ruled that Tri-State Capital Limited and Mombo iCapital Limited lacked the legal capacity to enforce their loan agreements in court.

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