A Kenyan borrower has won a court battle against Ngao Credit Limited after the court ordered the release of his vehicle, which had been repossessed despite him having paid back more than double the amount he originally borrowed.
According to court findings involving Ngao Credit, the borrower had taken a loan of KSh120,000 and went on to repay more than KSh254,000 before the lender seized his vehicle and demanded an additional KSh258,000 in interest and penalties.
The case has drawn attention to concerns about lending practices that leave borrowers facing huge financial demands even after making substantial repayments. In reviewing the matter, the court found that the borrower had established a strong case against the lender.
The judge noted that the principal loan amount had already been repaid nearly twice over and that the lender did not provide sufficient evidence to justify repossessing the vehicle.
As a result, the court ordered Ngao Credit to release the vehicle immediately. The ruling also barred the company from selling, transferring, or interfering with the vehicle while the matter continues through the legal process.
The decision has been viewed as an important reminder that lenders must act within the law when recovering loans and enforcing repayment agreements.
The case also brought renewed focus to the in duplum principle, a legal doctrine designed to protect borrowers from excessive interest charges. Under this principle, interest on a troubled loan should not continue growing indefinitely once it reaches the amount of the outstanding principal.
The rule is intended to prevent situations where a relatively small loan grows into an overwhelming debt burden that becomes impossible for a borrower to clear.
Despite the existence of such protections, disputes involving large interest charges and penalties continue to arise. Many Kenyans rely on logbook loans and microfinance lenders when they are unable to access credit from traditional banks.
These loans often provide quick access to money for emergencies, business needs, school fees, or household expenses. However, borrowers sometimes find themselves struggling with high interest rates and additional charges that significantly increase the amount owed.
The court’s ruling serves as a reminder for borrowers to keep detailed records of all payments made toward their loans. It also sends a signal that lenders must be able to justify their actions when taking measures such as repossessing vehicles
.For many people facing similar disputes, the decision offers hope that courts can help enforce existing legal protections.
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