Faulu Microfinance Bank Limited v Obiero (Commercial Claim E9210 of 2024) [2025] SCC 61 (KLR)
The bottom line
#What this practically means
#Executive summary
#Key legal issues
#Whether the Respondent settled the loan of Kshs. 200,000/= advanced to him
The Respondent did not settle the loan. His loan statement did not show the loan status at filing, and he failed to disclose the bank account through which his cheque of 09th April 2023 was cleared or the Faulu account from which the M-Pesa funds originated, leaving the court to speculate.
The Respondent relied on a stale loan statement (up to 24th January 2023), a cheque dated 09th April 2023 and an M-Pesa statement, but none disclosed the account numbers needed to trace payment into the Claimant's hands. The court held this would amount to a journey of surmises and imaginations. The Claimant's evidence that the cheque bounced was therefore uncontroverted, and the burden of proof under section 107(1) of the Evidence Act was not discharged by the Respondent.
Whether the amount claimed violates the in duplum rule under section 44A of the Banking Act
The court declined to make a finding because neither party computed the amount due under section 44A; it directed the Claimant to adjust the sum if it offends the section.
Section 44A caps recoverable interest on non-performing loans, but its application requires computation. Following the Court of Appeal in James Muniu Mucheru and Daima Bank, the court held it is not for the court to do the calculation; the party seeking payment must reconcile and tabulate the figures. Absent such computation, no finding could be made, though judgment was entered subject to adjustment under section 44A.
Whether the court had jurisdiction given the lapse of sixty days under section 34(1) of the Small Claims Court Act
The sixty-day period is directory or aspirational, not mandatory, and its lapse did not oust the court's jurisdiction.
The operational words 'as far as is practicable' anticipate factors beyond a claimant's control: shortage of adjudicators, leave, illness, training and administrative duties. Judicial notice was taken of these realities. Dismissing a claim for such delay would defeat the overriding objective of access to justice. The court aligned itself with High Court authority holding the period aspirational, and with conflicting High Court authority it was entitled to choose the school of thought it subscribed to.
Legal principles established
#- The sixty-day disposal period under section 34(1) of the Small Claims Court Act is directory or aspirational and not penal; failure to determine a claim within sixty days does not oust the court's jurisdiction.
- Where neither party computes the amount due in accordance with the in duplum rule under section 44A of the Banking Act, the court will decline to make a finding on whether the sum claimed offends the rule.
- Where there are conflicting decisions from the High Court on an issue, a lower court has the discretion to follow the school of thought it subscribes to.
Court orders
#- 1.Judgment is entered against the Respondent for the sum of Kshs. 144,168.53/=
- 2.The sum in (a) above will earn interest at court rates from the date of this judgment till payment in full
- 3.In the event that the amount in (a) above offends the provisions of section 44A of the Act, the Claimant is directed to adjust the sum due accordingly
- 4.The Claimant will have the costs of this claim assessed at Kshs. 30,000/=
- 5.Certificate of Costs and decree to issue forthwith; file closed
- Jurisdiction invoked
- Small Claims Court Act
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Faulu Microfinance Bank Limited v Obiero (Commercial Claim E9210 of 2024) [2025] SCC 61 (KLR)", Case Analysis (2025). . Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2025/61/eng@2025-09-02
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.