Entities operating digital lending businesses without a Central Bank of Kenya (CBK) licence will no longer have access to legal redress, following a ruling by the Milimani Small Claims Court in Nairobi.

Magistrate Kiongo Kagenyo made the decision after Aventus Technology Limited, a digital lender, attempted to pursue a case despite failing to meet CBK regulations.

The court found the firm non-compliant with Section 33S of the CBK Act, which bars unlicensed entities from offering digital credit services in Kenya.

Donald Nyaga, representing Aventus Technology Limited, faced difficulty justifying the firm’s legal standing.

“In his response, Nyaga informed the Court that the company is in the pipeline of compliance,” the magistrate stated.

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However, the court ruled against the lender, asserting, “As it stands therefore, Aventus Technology Limited is operating in non-conformity with the dictates of the regulating Authority and the court cannot dignify an illegality by presiding over such matters.”

All cases filed by Aventus Technology Limited were subsequently dismissed, with the court declaring, “For the foregoing, all the matters filed by Aventus Technology Limited as appearing in today’s cause list are hereby dismissed for the Claimant is operating contrary to the law.”

The ruling also placed other claimants under scrutiny, including Kalita System Debt Holding Kenya Limited, Garnet Portfolio Management Limited, Sirius Collect Limited, M-Collect Limited, and Maxlev-Finance Limited, for filing cases and later abandoning them.

“The totality of the foregoing is that the Court is compelled to make a finding that the Claimant is The Judiciary of Kenya abusing the Court process making it a candidate of being declared a vexatious litigant pursuant to section 2 (1) of the Vexatious Proceedings Act, and consequently dismiss the suit in limine, at this stage, which it hereby does.”

This ruling now reinforces CBK’s regulatory authority, shutting the door on legal claims by unlicensed digital lenders until they meet compliance requirements.