Unajua which laws in Kenya zinakuprotect kama borrower? 👇

In Kenya, the Consumer Protection Act, 2012 and the regulations enforced by the Central Bank of Kenya (CBK) provide safeguards for borrowers against predatory lending practices, including unfair penalties imposed by loan sharks.

Key Legal Protections:

1. Central Bank of Kenya Act and Digital Credit Providers Regulations (2022):

   • These regulations cap excessive charges and ensure fair lending practices for borrowers.
   • Digital lenders are prohibited from imposing penalties that exceed twice the outstanding loan amount, which was a rampant practice among loan sharks before regulation.
   • All digital lenders must now be licensed and monitored by the CBK to operate legally in Kenya.

2. Consumer Protection Act, 2012:

   • The act protects borrowers from unfair terms and practices in credit agreements.
   • It prohibits:
     • Overcharging on penalties.
     • Lack of transparency in loan terms.
     • Aggressive debt collection methods that harm borrowers' dignity.

3. Fair Administrative Action Act, 2015:

   • Protects borrowers from arbitrary or unfair administrative actions by lenders, ensuring penalties and collections follow fair processes.

4. The National Payment System Act, 2011:

   • Ensures transparency in mobile money and digital lending platforms, which many Kenyans use to access loans.

Borrower's Rights Under These Laws:

• Reasonable Interest Rates: Lenders must not impose exorbitant or hidden charges.

• Cap on Penalties: Borrowers cannot be penalized more than twice the loan amount, as regulated by CBK for digital and mobile lenders.

• Transparent Terms: Borrowers have the right to clear and understandable loan terms, including interest rates and repayment schedules.

• Fair Debt Collection: Harassment, public shaming, or abusive tactics in debt recovery are strictly prohibited.

What Borrowers Can Do: If a borrower feels that their rights are being violated (e.g., being charged unfair penalties), they can:

1. Report to the Central Bank of Kenya: File a complaint against the lender.
2. Contact the Consumer Protection Department: Seek guidance on how to resolve disputes.
3. Take Legal Action: Sue the lender for violating the Consumer Protection Act or CBK regulations.

These laws collectively ensure that borrowers are shielded from exploitative practices, fostering a fair and transparent lending environment.

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