https://new.kenyalaw.org/akn/ke/judgment/scc/2026/157

Zenka Digital Limited v Njeru (Claim E97892 of 2025) [2026] SCC 157 (KLR) (10 July 2026) (Judgment) Neutral citation: [2026] SCC 157 (KLR) Republic of Kenya In the Milimani Small Claims Court Claim E97892 of 2025 GW Kiamah, RM July 10, 2026 Between Zenka Digital Limited Claimant and Benson Njeru Respondent Judgment 1.The claimant instituted this claim vide statement of claim dated 10/7/2025 seeking judgment against the respondent for Kshs. 152,000/=, costs of the suit and interest on the basis that it provided the respondent with a mobile loan of Kshs. 76,000/= repayable within one month at 36% interest thus the total payable was Kshs. 103,360.00/=. That there was also a daily interest of 1.5% in the even of default. That the respondent failed to repay thus the filing of the claim. 2.The respondent filed a response dated 8/10/2025 and pleaded that the claimed sum was exaggerated as they were above the interest allowed by law. That he had made several payments that were not factored in the claim. 3.The claim proceeded under Section 30 of The Small Claims Court Act and the claimant filed submissions dated 11/3/2026. I have considered the submissions on record as well as the pleadings and documents before this court. 4.I have seen and considered the pleadings, testimonies, evidence and submissions before court. The main issue for determination is whether the claimant has proven that the claim as against the respondent, and whether the interest rates were in contravention with the law governing interest rates. 5.The standard of proof in civil claims is on a balance of probabilities. See the Court of Appeal in Mumbi M'Nabea v David M. Wachira [2016] eKLR. 6.Sections 107, 108 and 109 of the Evidence Act, Chapter 80 of the Laws of Kenya places the burden of proof of a fact on the person who wishes the court to believe in the existence of such fact. 7.There was on record the mobile loan application form for Kshs. 76,000/= as well as proof of disbursements of the sums to the respondent’s Mpesa account number. As such, the loan of Kshs. 76,000/= was sufficiently proven. 8.As regards the interest charged, I do note that the claimant was loaned a total of Kshs. 76,000/=. The claimant charged interest at 36% per month which is translates to approximately 438% per annum. The interest rate charged is unconscionable noting that the principal would attract interest of approximately Kshs. 27,360/= within a month. Further, the claimant charged a daily default rate of 1.5% translating to approximately 45% monthly. 9.I do note that the combined effect of the contractual interest of 36% per month and the default charge of 1.5% per day would lead to a rapid and disproportionate escalation of the debt beyond the principal sum advanced. Such rates are capable of producing a debt that bears no reasonable relationship to the amount borrowed and would result in an oppressive burden upon the borrower. The rationale underlying the in duplum rule is to guard against the excessive accumulation of interest and charges and to prevent a lender from recovering amounts that are grossly disproportionate to the principal debt. In the circumstances of this case, enforcement of the impugned interest and default provisions would offend the principles of fairness, equity and good conscience that guide the Court in the enforcement of contractual obligations. 10.While parties are generally bound by the terms of their contract, this Court retains discretion to decline enforcement of terms that result in unjust, oppressive, or unconscionable outcomes. In the circumstances, the Court finds the claimed interest and penalties to be disproportionate and inequitable. The Court therefore declines to enforce them. 11.Before making final orders, I do note that though the respondent claimed it had made some payments, the same was not supported by evidence and there was nothing to demonstrate that he had reduced the loaned amount. 12.In the end, I find that the claim is partly successful. To that end, I hereby order as follows: -1.Judgment is hereby entered in favour of the claimant as against the respondent for the sum of Kshs. 76,000/= being the principle loan amount, plus interest at 18% per annum for a period of two (2) months from 23/9/2024.2.The total amount shall attract interest at court rates from the date of filing suit until payment in full.3.The claimant is awarded costs assessed at Kshs. 10,000 14.The respondent is awarded 30 days stay of execution.It is so decreed. DATED AND DELIVERED AT NAIROBI VIA CTS THIS 10TH DAY OF JULY 2026HON. GLADYS. W. KIAMAHRESIDENT MAGISTRATE/ADJUDICATOR