Principal Legislation
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   1.   Interpretation.

   2.   Licences to be taken out by moneylenders.

   3.   Certificate required for grant of moneylenders licence.

   4.   Suspension and forfeiture of moneylenders certificates.

   5.   Names to be stated on documents issued by moneylenders.

   6.   Form of moneylenders contracts.

   7.   Prohibition of compound interest and provision as to defaults.

   8.   Obligation to supply information to borrower.

   9.   Moneylenders to give receipts and keep records.

   10.   Powers of court.

   11.   Reopening transactions of moneylenders.

   12.   Harsh and unconscionable interest rates.

   13.   Restrictions on moneylending advertisements.

   14.   Penalties for false statements and representations.

   15.   Notice and information on assignment of moneylenders debts.

   16.   Application in respect of assignees.

   17.   Provisions as to bankruptcy proceedings for moneylenders loans.

   18.   Prohibition of charge for expenses on loans.

   19.   Limitation of time for proceedings.

   20.   Penalty for taking promissory note in which amount left blank or not truly stated.

   21.   Saving.

   22.   Rules.


      Schedule   Calculation of interest where the interest charged on a loan is not expressed in terms of a rate.



Commencement: 1 January, 1952.

   An Act to make provision for the regulation of moneylending.


1.   Interpretation.

   (1) In this Act, unless the context otherwise requires—

   (a)   "authorised name" and "authorised address" mean respectively the name under which and the address at which a moneylender is authorised by a certificate granted under this Act to carry on business as a moneylender;

   (b)   "business name" means the name or style under which any business is carried on, whether in partnership or otherwise;

   (c)   "certificate" means a certificate granted under section 3;

   (d)   "chattels transfer" means a bill of sale, a letter of hypothecation or a hire-purchase agreement;

   (e)   "firm" means an unincorporate body of two or more individuals, or one or more individuals and one or more corporations, or two or more corporations, who have entered into partnership with one another with a view to carrying on business for profit;

   (f)   "interest" includes any amount, by whatsoever name called, in excess of the principal, paid or payable to a moneylender in consideration of or otherwise in respect of a loan;

   (g)   "magistrate" means a chief magistrate and a magistrate grade I or grade II;

   (h)    "moneylender" includes every person whose business is that of moneylending or who advertises or announces himself or herself or holds himself or herself out in any way as carrying on that business whether or not that person also possesses or earns property or money derived from sources other than the lending of money and whether or not that person carries on the business as a principal or agent; but shall not include—

      (i)   any person bona fide carrying on the business of banking or insurance or bona fide carrying on any business not having for its primary object the lending of money, in the course of which and for the purposes of which he or she lends money;

      (ii)   any society registered under the Cooperative Societies Act;

      (iii)   any body corporate, incorporated or empowered by special Act to lend money in accordance with that Act;

      (iv)   any person or body corporate exempted from this Act by order of the Minister;

   (i)   "principal" means in relation to a loan the amount actually lent to the borrower.

   (2) Where by a contract for the loan of money by a moneylender the interest charged on the loan is not expressed in terms of a rate, any amount paid or payable to the moneylender under the contract, other than simple interest charged in accordance with section 7(2), shall be appropriated to principal and interest in the proportion that the principal bears to the total amount of the interest, and the rate percent per year represented by the interest charged as calculated in accordance with the Schedule to this Act shall be deemed to be the rate of interest charged on the loan.


2.   Licences to be taken out by moneylenders.

   (1) Except as provided in subsection (2), every moneylender shall take out annually in respect of every address at which he or she carries on his or her business as moneylender, a licence (in this Act referred to as a "moneylenders licence") which shall expire on the 31st"> day of December in every year, and there shall be charged on every moneylenders licence a licence fee of 1,000 shillings, or, if the licence is taken out not more than six months before the expiration of the licence, of 500 shillings.

   (2) If one partner in a firm of moneylenders has duly taken out a moneylenders licence, every other partner in the firm shall, subject to section 3, be issued with a moneylenders licence free of charge for the business of the firm for such time as he or she shall remain a member of the firm.

   (3) A moneylenders licence shall be taken out by a moneylender in his or her true name, and shall be void if it is taken out in any other name, but every moneylenders licence shall also show the moneylenders authorised name and authorised address.

   (4) If any person—

   (a)   takes out a moneylenders licence in any name other than his or her true name;

   (b)   carries on business as a moneylender without having in force a proper moneylenders licence authorising him or her so to do, or being licensed as a moneylender, carries on business as such in any name other than his or her authorised name, or at any other place than his or her authorised address or addresses; or

   (c)   enters into any agreement in the course of his or her business as a moneylender with respect to the advance or repayment of money, or takes any security for money in the course of his or her business as a moneylender, otherwise than in his or her authorised name,

he or she contravenes this Act and for each offence is liable on conviction to a penalty of 2,000 shillings; except that on a second or subsequent conviction of any person, other than a company, for an offence under this subsection, the court may, in lieu of or in addition to ordering the offender to pay the penalty aforesaid, order him or her to be imprisoned for a term not exceeding three months, and an offender being a company on a second or subsequent conviction is liable to a penalty of 10,000 shillings.


3.   Certificate required for grant of moneylenders licence.

   (1) A moneylenders licence shall not be granted except to a person who holds a certificate granted in accordance with the provisions of this section authorising the grant of the licence to that person, and a separate certificate shall be required in respect of every separate licence.

   (2) Any moneylenders licence granted in contravention of this section shall be void.

   (3) Certificates under this section shall be granted by a magistrate having jurisdiction in the place in which the moneylenders business is to be carried on.

   (4) Every certificate granted to a moneylender shall show his or her true name and the name under which, and the address at which, he or she is authorised by the certificate to carry on business as such, and a certificate shall not authorise a moneylender to carry on business at more than one address, or under more than one name, or under any name which includes the word "bank", or otherwise implies that he or she carries on banking business, and no certificate shall authorise a moneylender to carry on business under any name except—

   (a)   his or his true name;

   (b)   the name of a firm in which he or she is a partner, not being a firm required by the Business Names Registration Act to be registered; or

   (c)   a business name, whether of an individual or of a firm in which he or she is a partner, under which he or she or the firm has, at the commencement of this Act, been registered for not less than three years under the Business Names Registration Act.

   (5) A certificate shall come into force on the date specified in the certificate, and shall expire on the following 31st"> day of December.

   (6) A certificate shall not be refused except on one or more of the following grounds—

   (a)   that satisfactory evidence has not been produced of the good character of the applicant, and, in the case of a company, of the persons responsible for the management of the company;

   (b)   that satisfactory evidence has been produced that the applicant, or any person responsible or proposed to be responsible for the management of his or her business as a moneylender, is not a fit and proper person to hold a certificate;

   (c)   that the applicant, or any person responsible or proposed to be responsible for the management of his or her business as a moneylender, is by order of a court disqualified from holding a certificate;

   (d)   that the applicant has not complied with the provisions of any rules made under this Act with respect to applications for certificates.

   (7) Any person aggrieved by the refusal of a magistrate to grant a certificate may appeal to the High Court.


4.   Suspension and forfeiture of moneylenders certificates.


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