Mwananchi Credit Forced To Refund Customer Kes1.92M After Loan Overcharge

Mwananchi Credit Limited was forced to pay their client Kes1.92 million for a loan overcharge by the non-deposit microfinance.

A customer who obtained a loan for Kes 9 million filed a complaint with the Competition Authority of Kenya (CAK).

With a monthly payment of Kes 825,000 and connected land as collateral, the facility was to be repaid over 24 months at a 10% interest rate.

The complainant, however, chose early repayment.

She was charged a loan obligation of $ 13.5 million even though she was supposed to repay $ 11.7 million.

After that, CAK launched an investigation into possible violations of Sections 55(a)(ii) and 56(1), which deal with deceptive practices and unconscionable behaviour, respectively.

“The unconscionable conduct was assessed against the requirementsof Section 56 (2) (a) and (d) of the Act.COMPETITION AUTHORITY OF KENYA54Following the Authority’s intervention, the accused chose to settle the matter,” CAK said in its latest report.

“As part of the settlement, Mwananchi refunded the complainant Kes. 1,923,750 and the Authority sensitizedits staff on the Consumer welfare provisions of the Act. Further, Mwananchi aligned their loanterms and conditions with Article 46 of the Constitution of Kenya, the Act and the Competition(General) Rules, 2019.”