The growing number of court cases linked to digital lender LendPlus has raised serious questions about the way debt collection is being handled and whether the legal system is being used fairly against borrowers.
LendPlus, a digital lending platform, has reportedly filed more than 1,000 cases at the Small Claims Court over a single weekend, sparking concerns over the pressure such a large number of cases could place on the courts and borrowers facing financial difficulties.
The claims have also brought attention to complaints about the amounts some borrowers are being asked to repay. In one case, a borrower who received Sh30,000 was reportedly required to pay back Sh60,000.In another case, a borrower took a loan of Sh47,000.
According to the account provided, the lending application initially indicated that the borrower would repay Sh62,000 after three weeks.
However, after the three-week period ended, the amount demanded reportedly increased sharply to Sh123,000.
The borrower declined to pay the increased amount and was subsequently taken to court by LendPlus. The case was reportedly dismissed after questions arose over the lender’s licensing status with the Central Bank of Kenya (CBK).
The developments have placed renewed focus on the regulation of digital lenders and the protections available to Kenyans who borrow money through mobile lending platforms.
One of the key issues is the in duplum rule, which limits the amount of interest and other charges that can be recovered on certain loans once they reach the prescribed threshold.
Courts have previously dealt with cases involving unregulated lenders and excessive charges, making compliance with lending laws an important issue when such disputes reach court.
The reported filing of more than 1,000 cases in one weekend also raises concerns about the workload facing the Small Claims Court.
While lenders have a right to pursue legitimate debts through lawful channels, the courts must also ensure that claims meet the required legal standards before borrowers are subjected to further financial and legal pressure.
For borrowers, being served with court papers can be intimidating, particularly where they are already struggling to repay a loan.
The situation becomes more serious when the amount demanded is substantially higher than the amount originally borrowed.
The concerns surrounding LendPlus therefore go beyond individual loan disputes. They raise questions about responsible digital lending, debt collection practices, licensing and the role of regulators in protecting consumers.
The Central Bank of Kenya and other relevant authorities face calls to examine the reported cases and determine whether LendPlus has complied with Kenya’s lending and consumer protection laws.
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