Borrower Rights in Kenya: What Every Borrower Should Know

Understanding your borrower rights in Kenya makes you a safer, more confident borrower. Whether you are taking a mobile loan, a logbook loan or a salary-based facility, the law sets out what lenders must tell you, how they may and may not collect what you owe, how your personal information must be handled, and where you can go if something goes wrong.

This guide summarises the main protections in plain language. It is general information, not legal advice. If you are in a dispute, consider speaking to an advocate.

Who regulates lenders in Kenya?

Different lenders fall under different regulators. Banks and microfinance banks are licensed and supervised by the Central Bank of Kenya (CBK). Since the Central Bank of Kenya (Amendment) Act, 2021 and the Central Bank of Kenya (Digital Credit Providers) Regulations, 2022, non-deposit-taking lenders that provide credit through digital channels must also be licensed by the CBK as Digital Credit Providers (DCPs). SACCOs are supervised under their own framework.

The first right you have is the right to know who you are dealing with. Before borrowing, check that the lender is licensed. The CBK publishes a directory of licensed Digital Credit Providers on its website. Aspire Lending is licensed by the Central Bank of Kenya as a Digital Credit Provider.

Your right to clear disclosure before you sign

The DCP Regulations require lenders to set out the terms and conditions of a loan to the customer before the loan is granted. In practice, that means you should know, before you commit:

• The amount of credit you will receive.
• The interest rate and how it is calculated, including whether it is flat or on a reducing balance.
• All fees and charges.
• When each repayment is due and the total amount repayable.
• What happens if you pay late.

Lenders must also not use false, misleading or deceptive advertising, and changes to terms must be communicated to customers in advance. You are entitled to receipts for payments and to a statement of your account on request.

At Aspire, all charges, including the application fee and, on secured loans, the valuation fee, are set out in your written offer before you accept. Comprehensive insurance on financed vehicles is quoted separately by the insurer. Our guide on how loan interest rates work helps you read an offer, and how to compare lenders shows how to compare offers side by side. You can also see how each Aspire product is structured on our product comparison page, and try any amount and term in the loan calculator before you apply.

What this means for you

Never sign or click “accept” until you can see the total repayable. If a lender cannot or will not tell you, that alone is a reason to walk away. And never pay anyone to release a loan or to guarantee approval; that is a hallmark of fraud, as our guide to loan scams in Kenya explains.

Your right to fair debt collection

Falling behind on a loan does not remove your rights. The DCP Regulations specifically prohibit abusive collection practices. Among other things, a licensed digital lender must not:

• Use threats, violence or other means to harm you, your reputation or your property.
• Use obscene or profane language.
• Access your phone book or contact list for debt collection.
• Make unsolicited calls or send messages to your contacts or other third parties about your debt.
• Publish your information to shame or embarrass you.
• Otherwise harass, oppress or abuse you in connection with the debt.

Lenders remain responsible for how their agents behave, so these rules apply to collection agents acting for a lender too.

A lender is still entitled to contact you, remind you, and pursue lawful recovery, including enforcing security on a secured loan in line with your agreement and the law. The protections are about how that is done, not whether a debt must be repaid.

The in duplum principle

Kenyan law also limits how much can pile up on a loan that has stopped performing. Under the in duplum rule, which applies to banks under the Banking Act and is reflected in the DCP Regulations, the interest and charges recoverable on a non-performing loan cannot exceed the principal outstanding when the loan became non-performing, plus reasonable recovery expenses. It is not a reason to stop paying, but it means a debt cannot grow without limit.

If you are struggling with repayments, contact your lender early. Our guide on what to do if you miss a loan repayment sets out practical steps.

Your rights over your personal data

Lenders collect a great deal of personal information: your ID, phone number, M-PESA and bank statements, employment details and more. The Data Protection Act, 2019, enforced by the Office of the Data Protection Commissioner (ODPC), gives you rights over that information, including the right to:

• Be told what personal data is collected and why.
• Access the personal data a lender holds about you.
• Have inaccurate or out-of-date information corrected.
• Object to processing in certain circumstances, including for direct marketing.
• Ask for data to be deleted where it is no longer needed for a lawful purpose.

The ODPC has issued guidance for digital lenders stressing that consent must be freely given, specific and informed, and that borrowers should be told which third parties receive their data. Lenders that process personal data are also generally required to register with the ODPC as data controllers. If a lender mishandles your data, for example by contacting people in your phonebook, you can complain to the ODPC.

Your rights around CRB listing

Licensed lenders share both positive and negative information about borrowers with the licensed credit reference bureaus: Metropol, TransUnion and Creditinfo. Under the Banking (Credit Reference Bureau) Regulations, 2020, you have important protections. (The regulations are currently in force: a 2023 High Court decision that nullified them was suspended by the Court of Appeal pending the Central Bank of Kenya’s appeal, so check for any later changes.)

• Advance notice: a lender must notify you, in writing or electronically, before submitting negative information about you, generally at least 30 days beforehand.
• A minimum threshold: negative information should not be submitted for amounts of KES 1,000 or less.
• A free report: you are entitled to at least one free credit report from each bureau every year.
• Disputes: you can dispute inaccurate information. The lender has 21 days to investigate, and if the investigation is not completed in that period the disputed information should be deleted.
• A free first clearance certificate.

Our guide to your CRB report explains how to check your record and dispute errors step by step.

Your right to complain, and where to escalate

Every licensed Digital Credit Provider must have a documented procedure for handling customer complaints and must tell customers how to use it. The DCP Regulations expect complaints to be resolved promptly, within 30 days, and records to be kept of every complaint and its outcome.

If you have a complaint, follow this route:

1. Complain to the lender first, in writing. Set out what happened, what you want done, and attach evidence such as screenshots, statements or call logs. Keep a copy and note the date.
2. Allow the lender time to respond. Ask for a reference number and a written reply.
3. Escalate to the regulator if unresolved. If the lender does not resolve your complaint, or you believe it is breaching its licence conditions, you can escalate to the Central Bank of Kenya through the contact channels on its official website. Include the lender’s name, your complaint, the lender’s response and your evidence.
4. Data complaints go to the ODPC. Misuse of personal data, including contacting your phonebook or sharing your details without a lawful basis, can be reported to the Office of the Data Protection Commissioner.
5. CRB errors go to the bureau. Use the bureau’s dispute process, as described above.
6. Seek legal advice for serious matters. Where you have suffered loss or the dispute is complex, an advocate can advise on your options, including the courts.

Unlicensed lenders sit outside this system, which is a strong reason to borrow only from licensed providers.

Rights specific to secured loans

If your loan is secured on a vehicle or other asset, your agreement will set out the lender’s rights if you default. Read that section carefully before you sign, and ask questions about anything you do not understand. You are entitled to know how the lender’s interest is recorded against your asset and how it will be removed once you have repaid. Our guides on logbook loans and lender interest on NTSA logbooks explain how this works with vehicles.

Borrower rights in Kenya come with responsibilities

Borrowing is an agreement, and your rights sit alongside responsibilities:

• Give accurate information in your application.
• Read the offer and ask questions before accepting.
• Repay on time, or tell the lender early if you cannot.
• Keep insurance and security in place where your agreement requires it.
• Keep records of every payment.

Borrowers who know both sides tend to borrow better. Our guides on how much loan you can afford and the loan application checklist are good places to start.

How Aspire approaches your rights

As a Digital Credit Provider licensed by the Central Bank of Kenya, Aspire sets out every charge in a written offer before you sign, never asks for a payment to release funds, and lets you settle early with the figure set out in a written quote. If you have a question or a complaint, you can reach us through our contact page, by phone on 0791 200 500, by email at info@aspirelending.co.ke, or at our office at Rehema Place, Ngong Road, Nairobi. Answers to common questions are on our FAQ page.

The bottom line

Borrower rights in Kenya are real and enforceable. You are entitled to see the full cost before you sign, to be treated with dignity if you fall behind, to have your personal data protected, to see and correct your credit record, and to complain and escalate when something goes wrong. Borrow only from licensed lenders, keep records, and use the complaint route if a lender crosses the line.

Frequently asked questions

What are my main borrower rights in Kenya?

You have the right to clear disclosure of loan terms and costs before signing, fair and lawful debt collection, protection of your personal data, access to your credit report, and a route to complain and escalate.

Can a lender call my contacts about my loan?

Licensed Digital Credit Providers are prohibited from accessing your phone contacts for debt collection and from contacting third parties about your debt. Misuse of personal data can also be reported to the Office of the Data Protection Commissioner.

How long does a lender have to resolve my complaint?

The Digital Credit Providers Regulations, 2022 expect complaints to be resolved promptly, within 30 days. If your complaint is not resolved, you can escalate to the Central Bank of Kenya.

How do I check if a lender is licensed?

The Central Bank of Kenya publishes a directory of licensed Digital Credit Providers on its official website. Check it before sharing documents or accepting any loan.

Must a lender warn me before listing me on CRB?

Yes. Under the Banking (Credit Reference Bureau) Regulations, 2020, currently in force, a lender must notify you in advance before submitting negative information, and amounts of KES 1,000 or less should not be listed.

Is Aspire Lending licensed?

Yes. Aspire Lending is licensed by the Central Bank of Kenya as a Digital Credit Provider.