Tri-State Capital Limited v Kang’ethe (Claim E102800 of 2025) [2026] SCC 161 (KLR) (17 July 2026) (Judgment) Neutral citation: [2026] SCC 161 (KLR) REPUBLIC OF KENYA IN THE MILIMANI SMALL CLAIMS COURT CLAIM E102800 OF 2025 GW KIAMAH, RM JULY 17, 2026 BETWEEN TRI-STATE CAPITAL LIMITED ............................................................ CLAIMANT AND GEOFFREY MUCUKU KANG’ETHE ............................................... RESPONDENT JUDGMENT 1. The claimant instituted this claim vide the undated statement of claim seeking judgment against the respondent for Kshs. 500,000/= on the basis that it loaned the respondent Kshs. 213,500/= repayable as Kshs. 229,513/= in one instalment by 18/4/2021. That the facility was secured by the respondent’s motor vehicle registration number KBZ 817X. That the respondent defaulted payment leaving a balance of Kshs. 85,000/= which had since accrued to Kshs. 500,000/=. That the vehicle had a registered caveat and was not available for sale to recover the said amount. 2. Before delving into the merits of the case, I have considered the court record and note that the claimant is not licensed as a digital credit lender by CBK. Section 3 of the Banking Act (Cap 488) requires all persons or entities carrying out banking or financial business in Kenya to be licensed by the Central Bank of Kenya. It then follows that conducting lending business without such licensing amounts to an illegality and economic risk. 3. The rationale for such regulation is to protect members of the public from unregulated lending practices and to ensure that entities engaged in the business of advancing credit operate within the confines of the law. A party who undertakes regulated financial activities without the requisite authorization cannot invoke the aid of the Court to enforce rights arising from such unlawful activities. https://new.kenyalaw.org/akn/ke/judgment/scc/2026/161/eng@2026-07-17 1
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4. I say so relying on the case of Rei-Iman v Succeed Capital Limited (Civil Appeal E1374 of 2024) [2025] KEHC 19316 (KLR) (Civ) the Court held that: “ Allowing an unlicenced person to conduct businesses like banks would be against public policy, and this court has a duty to ensure that such does not happen. The upshot of the forgoing is that the suit that was led by the respondent in the lower court was a nonstarter since the Respondent lacked the legal capacity to sue.” 5. Applying that principle to the present case, I find that the claimant has not demonstrated that it possesses the legal capacity and regulatory authority necessary to engage in the lending activities disclosed in the statement of claim. Consequently, the claimant lacks the requisite standing to seek enforcement of the impugned lending arrangement before this Court. 6. In the circumstances, it becomes unnecessary to consider the merits of the claim. 7. As such, the claimant lacks the locus standi to institute or file a suit or in any way engage the court for redress. 8. The upshot is that the claim is hereby struck out with no orders as to costs. It is so decreed. DATED AND DELIVERED AT NAIROBI VIA CTS THIS 17TH DAY OF JULY 2026 HON. GLADYS .W. KIAMAH RESIDENT MAGISTRATE/ADJUDICATOR https://new.kenyalaw.org/akn/ke/judgment/scc/2026/161/eng@2026-07-17 2
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