Kenya’s financial sector has been jolted by a ruling that exposes the brutality of predatory lending — and sets powerful new limits on what banks, micro-lenders and private financiers can get away with.
It all began in January 2021, at the height of COVID-19. Businesses were collapsing, incomes had dried up, and even respected professionals were scrambling for survival capital.
Among them was Mathew Kyalo Mbobu — a distinguished lawyer, law lecturer and family man.
He borrowed Ksh11 million from Hypac Investments Limited.
The terms? Extortion dressed as a contract:
- 15% interest per month
- 5% weekly penalty on delays
- His family home as collateral
When compounded, this climbed to over 400% annual interest.
Still, Mbobu paid. Again and again.
By the time the dust settled, he had repaid Ksh22 million — double the principal.
But the lender wanted blood.
Hypac insisted that he still owed Ksh69 million, and moved to seize his home.
Mbobu fought back in court.
But in September 2025 — as the case progressed — he was shot dead by unknown gunmen along Magadi Road. A chilling twist that raised more questions than answers.
In a posthumous judgment, Justice Moses Ado delivered a verdict that has now become one of Kenya’s most important debt decisions. Justice Ado found that:
The loan terms were oppressive, unconscionable and illegal
The court declared the agreement void for violating fairness, public policy, and statutory protections.
The in duplum rule applies: Once interest paid equals the principal, interest stops accruing.
With Mbobu having paid Ksh22M on an 11M loan, the debt was fully settled.
The family home must be returned to his estate within 30 days. Any attempt to auction or dispose of it is illegal.
All further claims by the lender are unenforceable. Not one more shilling is payable.
This ruling isn’t just justice for one man — it’s a turning point for consumer protection in Kenya.
Why This Case Matters to Every Kenyan
If you’re a borrower:
- A signature does not surrender your rights.
- Courts will pierce predatory loan contracts.
- The in duplum rule can stop runaway interest and save your home.
- Always keep your receipts, statements and communication.
If you’re a lender or a bank:
- Oppressive terms will be struck down.
- Trying to profit from someone’s desperation can cost you everything.
- Violating the in duplum rule exposes you to massive losses — and possible criminal liability.
- Fairness is no longer optional; it’s enforceable.
A Legacy Written in Blood — and Justice
Mathew Kyalo Mbobu didn’t live to hear the judgment.
But his fight has rewritten Kenyan debt jurisprudence.
His case is now a shield for thousands of Kenyans trapped by ruthless lenders, and a warning to every financial institution:
Exploit borrowers at your own risk. The courts are watching. Rest in Peace, Counsel Mbobu. Your struggle has become the nation’s protection.
