The National Assembly has been petitioned to amend the Consumer Protection Act, Cap 501, to formally codify the 𝘪𝘯 𝘥𝘶𝘱𝘭𝘶𝘮 𝘳𝘶𝘭𝘦, a safeguard intended to protect borrowers from paying interest that exceeds the original loan principal.

Speaker of the National Assembly, Hon. Moses Wetang’ula informed the House of a petition from Mr. Allen Waiaki Kishore, a Senior Counsel with Mwai & Allen Advocates.

In the petition, Mr. Kishore argues that while Section 44A of the Banking Act already provides for the 𝘪𝘯 𝘥𝘶𝘱𝘭𝘶𝘮 𝘳𝘶𝘭𝘦 stating that “interest on a loan ceases to accrue once it equals the outstanding principal amount when a loan becomes non-performing”—in practice, borrowers continue to suffer under exploitative charges.

“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,” the Speaker told Members.

According to the petition, banks, financial institutions, and unscrupulous lenders routinely impose interest, penalties, and other charges beyond the loan principal, exposing borrowers to violations of their rights under Article 46 of the Constitution.

The petitioner further highlighted harassment by debt collectors, inconsistent judicial interpretations on when the rule applies—whether before or after restructuring a loan—and disputes over whether penalties count as interest.

“The lack of clarity and enforcement undermines public confidence in the financial sector and violates national values under Article 10, especially transparency, accountability, and social justice,” the petition reads.

Speaker Wetang’ula further stated, “the petitioner therefore prays that the National Assembly considers amending the Consumer Protection Act, Cap 501, to provide for when the in duplum rule takes effect, whether it applies to penalties, default charges, and other costs in addition to interest, uniform mechanisms for debt restructuring and recovery in compliance with the rule."

The Petition also calls on the House to redress mechanisms for borrowers who have been subjected to unlawful interest charges, including refunds or settlements; and any other mechanisms that will secure borrowers from exploitation, enhance consumer protection, and uphold the Constitution.

The Speaker confirmed that the matter falls within the authority of the House and is not pending before any court or constitutional body. He committed the petition to the Public Petitions Committee for review in accordance with Standing Orders.

Hon. Omboko Milemba welcomed the petition and urged a broad regulatory reform. “From what we see is that the banks, under the other lending institutions, still are very harsh on those who do borrow, and they have actually made it difficult for the local and simple people within the communities to do the borrowing,” he said.

He pointed to the proliferation of unregulated micro-finance outfits and digital lenders. “But while still are the other players who have come on board and who are not or seem not to be controlled or checked by this law, these are the many mushrooming small financing institutions which are also giving loans to many Kenyans.”

Hon. Milemba added, “I think as a committee looks at this particular petition, you should consider roping in the other many lending institutions which are making it very difficult and catapulting the interest beyond what the borrowers can actually achieve.”