Your Rights as a Borrower: What Banks Don’t Always Tell You

Written by AESIR Advocates 23/12/2025

Borrowing money should be straightforward,  but anyone who’s taken a loan in Kenya knows it can feel confusing, fast, and (sometimes) a little unfair. The good news: the law actually gives you several concrete rights. Below are the most important things every borrower in Kenya should know, in plain language.

1. You have a right to clear disclosure of terms

Lenders are required to give you understandable information about interest rates, fees, penalties, and the total cost of credit. The Central Bank’s consumer-protection guidance and prudential rules require transparency so customers can compare products and make informed choices. If your loan documents are full of unexplained numbers or hidden fees, ask for a written, plain-language breakdown.

2. You have a Right to Fair Treatment and Protection from Abusive Collection

Regulators have moved to curb harassment by some lenders and debt collectors. The Central Bank’s guidelines (and newer regulatory initiatives aimed at digital and micro-lenders) emphasize courteous, lawful collection practices and require institutions to handle complaints promptly. If collectors are threatening, publicly shaming you, or contacting family members inappropriately, that’s a red flag, and you can report it.

3. You have the Right to Privacy of Your Personal Data

When you apply for credit, you share personal information, phone numbers, ID, bank statements, and sometimes even contacts. The Data Protection Act (2019) requires lenders and credit-reporting agencies to process your data lawfully, limit how long they keep it, and let you know why they need it. You can request access to your data, correct errors, or ask that unnecessarily-held information be deleted. If a lender shares your data without a lawful basis, you can complain to the Office of the Data Protection Commissioner.

4. You have Rights Around Credit Reporting and Corrections

Banks and microfinance institutions share data with Credit Reference Bureaus (CRBs). The CRB Regulations give you rights to see your credit report, challenge incorrect information, and get it corrected if it’s wrong. Before a lender takes an adverse action because of CRB data (for example, denying a loan), they must give you notice and the chance to respond. Regularly checking your CRB file helps you spot mistakes early.

5. You can Challenge Unfair Pricing or Terms (and seek redress)

If you suspect unfair terms, hidden charges, or misrepresentation, you can first raise a formal complaint with the lender. If unsatisfied, escalate to the Central Bank of Kenya or take the matter to court. Recent regulatory moves have also expanded protections for borrowers of digital and micro-credit. Scholarly and policy research shows digital credit increased access but also introduced new risks (pricing opacity, over-borrowing), so keep records and verify terms before you accept a loan.

Quick Practical tips for borrowers

• Ask for a written loan summary showing the annualised cost, fees, and repayment schedule.

• Save copies of all communications (SMS, WhatsApp, email).

• Regularly check your credit report and correct errors fast.

• Don’t give access to your phone contacts or social media passwords, that’s not necessary for most loans.

• If you’re harassed, document dates/names and report to the lender and CBK or ODPC.

Final Word

Lenders in Kenya operate under a growing framework of protections, from the Banking Act and CBK guidelines to the Data Protection Act and CRB Regulations. But rules don’t help if borrowers don’t know them. If a loan feels unfair or you’re getting pressured, you have rights, and routes for redress. Need help checking a contract or drafting a complaint? Drop us a line and we’ll walk you through it.