Waithaka t/a Genesis Micro Network v Kithia (Claim E105544 of 2025) [2026] SCC 59 (KLR)
The bottom line
#A Nairobi court threw out a Kshs. 1 million loan claim because the lender was not licensed by the Central Bank of Kenya.
What this practically means
#Executive summary
#Questions the Court framed
#The issues the Court set itself to decide, in its own words.
- 1.Whether the claimant, not licensed by the Central Bank of Kenya as a digital credit lender, has locus standi to sue to enforce the lending arrangement
- 2.Whether the claim on the loan and dishonoured cheques can be determined on its merits
Key legal issues
#Whether an unlicensed lender has locus standi to sue on a loan
The claimant lacks locus standi; lending without CBK licensing is illegal and the court will not aid such a claimant
The court found on the record that the claimant is not licensed by CBK as a digital credit lender. Relying on Rei-Iman v Succeed Capital Limited, the court held that allowing unlicensed persons to conduct banking-type business would offend public policy. It was therefore unnecessary to consider the merits - default, dishonoured cheques or amounts claimed - since the claimant lacked legal capacity to enforce the lending arrangement.
Whether the merits of the claim (default, dishonoured cheques, amounts) required determination
No - the locus standi defect rendered consideration of the merits unnecessary
Having found the claimant lacked standing, the court declined to venture into the merits of the alleged loan, the 10% monthly interest, the dishonoured cheques or the amounts claimed. The claim was struck out in its entirety rather than dismissed after full hearing.
Legal principles established
#- All persons or entities carrying out banking or financial business in Kenya must be licensed by the Central Bank of Kenya, and unlicensed lending is an illegality
- A party carrying on regulated financial activity without authorization cannot invoke the aid of the court to enforce rights arising from the unlawful activity
Court orders
#- 1.The claim is struck out
- 2.No orders as to costs
The bench
#One judgment of the whole court — no separate or dissenting opinions.
Wrote the judgment
- Jurisdiction invoked
- Small Claims Court first-instance claim; parties not individually named in the judgment as supplied
Relief refused
#Judgment for Kshs. 1 million against the respondent for the loaned funds
Claimant lacked legal capacity and regulatory authority, being unlicensed, and therefore lacked locus standi to enforce the lending arrangement
Costs
No orders as to costs - the claim was struck out with no orders as to costs
Quotable passages
#Verbatim from the judgment, each located to the page it appears on in the official PDF — so these can be cited and checked directly.
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.
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 is that the claim is hereby struck out with no orders as to costs. It is so decreed.
Issues in the judgment
#The parties are not named in the judgment; only 'the claimant' and 'the respondent' appear throughout
The date of the statement of claim (24/10/2025) postdates nothing internally but the file/case number is not stated in the judgment as supplied
Key timeline
#Practical implications
#Frequently asked questions
#Cite this brief
#Cite this brief
Caselaw, "Waithaka t/a Genesis Micro Network v Kithia (Claim E105544 of 2025) [2026] SCC 59 (KLR)", Case Analysis (2026). Not stated in the judgment. Source: https://new.kenyalaw.org/akn/ke/judgment/scc/2026/59/eng@2026-07-03
Suggested citation format for research notes or client memos. Always verify the original judgment before relying on any point.