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The High Court has held that the in duplum rule applies to all lenders including microfinances. In Faulu Microfinance Bank Limited v Kilonzo, a borrower had taken a Kshs. 569,000 loan but defaulted, prompting the lender to claim over Kshs. 621,000. Despite the matter being undefended, the trial court applied the in duplum rule and reduced the recoverable amount to about Kshs. 145,000.
On appeal, the lender argued that the rule only applies to banks, not microfinance institutions. The High Court rejected that argument, holding that the rule is a matter of public policy meant to protect borrowers from excessive interest, and therefore binds all lenders. Bottom line: no lender can hide behind technicalities to inflate debt endlessly.



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