The Court of Appeal quashed a commercial loan agreement carrying 36% per annum, terming it as unconscionable loan agreement.
In Dhiman v Shah [2025] KECA 1264 (KLR), a lender agreed to advance Kshs. 13M but only disbursed Kshs. 7M, secured by a Lavington property, then obtained judgment and purchased the same property after default and through the punitive interest, the claim ballooned to a staggering Kshs. 69 billion.
The Court found the terms oppressive, nullified the judgment, and reversed the transfer of the property. Courts will not enforce exploitative loan agreements.
You can challenge your loan agreement if you feel that the interest terms are unconscionable.