In duplum is a rule intended to limit unchecked interest accumulation on a non-performing loan. Section 44A of Kenya’s Banking Act limits what an “institution” under that Act may recover to the principal owing when the loan becomes non-performing, contractual interest not exceeding that principal, and recovery expenses.
What it does not mean
- It does not automatically cancel the principal.
- It does not say every performing loan’s total interest can never exceed its original principal.
- It does not necessarily remove reasonable recovery expenses.
- It does not make it safe to ignore notices, statements or court proceedings.
- It should not be applied to a SACCO or other lender without checking the governing statute, contract and current legal interpretation.
Why real cases are more complicated
The date a facility became non-performing, the principal outstanding on that date, resumed payments, later default, court-ordered interest and the legal status of the lender can all matter. Kenyan court decisions have discussed the scope in different lending contexts, so a one-line social-media formula is not a reliable dispute analysis.
What a borrower should do
- Request a complete statement and loan contract.
- Identify principal, contractual interest, penalties, fees and recovery expenses separately.
- Ask the lender to explain the non-performing date and calculation.
- Dispute errors promptly in writing.
- Obtain qualified legal advice when the amount or enforcement risk is material.
Primary sources
These links support the important legal or regulatory points in this guide. Verify that you are reading the current version.