ADVOKS GLOBAL · KENYA
The Central Bank of Kenya (Mortgage Refinance Companies) Regulations, 2019
35. Limit on interest recoverable from non-performing loans
Edition: 2022-12-31 · In force
35. Limit on interest recoverable from non-performing loans
(1)A mortgage refinance company shall be limited in what it may recover from a debtor with respect to a non-performing loan to the maximum amount under sub-regulation (2).(2)The maximum amount referred to under sub-regulation (1) is the sum of the following—(a)the principal owing when the loan becomes non-performing;(b)interest, in accordance with the contract between the debtor and the mortgage refinance company, not exceeding the principal owing when the loan becomes non-performing; and(c)expenses incurred in the recovery of any amounts owed by the debtor.(3)If a debtor resumes payments on a non-performing loan and then the loan becomes non-performing again, the limitation under sub-regulation (2) (a) and (b) shall be determined with respect to the time the loan last became non-performing.(4)This regulation shall not apply to limit any interest under a court order accruing after the order is made.(5)A mortgage refinance company shall not recover through a court of law any interest which is affected by the requirements of this regulation.(6)A loan becomes non-performing when principal or interest is due and unpaid for ninety days or more; or interest payments for ninety days or more have been re-financed, or rolled-over into a new loan.(7)In this regulation—"debtor" includes a person who becomes indebted to a mortgage refinance company because of a guarantee made with respect to the repayment of an amount owed by another person; and"loan" includes any advance, credit facility, financial guarantee or any other liability incurred on behalf of any person.