M-Pesa Trail Pivotal as Kenyan Court Orders Sh995K Refund in Friendship Loan Row
The Small Claims Court ruled in favour of a woman whose mobile money records contradicted her friend's claims of prior loan repayments and an illegal employment scheme.
In a ruling highlighting the undeniable weight of digital financial trails, Kenya's Small Claims Court has compelled a woman to repay a sum of Sh995,100 to a friend. The court also awarded Lucy Tanui an additional Sh67,000 in costs and interest, finding that Sharon Mutai failed to provide a credible explanation for retaining the money, despite irrefutable M-Pesa evidence.
The dispute originated from a series of mobile money transfers made between Ms. Tanui and Ms. Mutai during April and May 2025, amounting to Sh995,100. Ms. Tanui asserted these funds were a loan intended to secure employment with the Teachers Service Commission (TSC) for a dependant, which Ms. Mutai was expected to refund. However, Ms. Mutai presented a starkly different account of the transactions.
Before the court, Ms. Mutai contended that no formal contract existed between them. She claimed the transfers were, in fact, instalment repayments for an earlier Sh1.4 million cash loan she had allegedly advanced to Ms. Tanui in 2024. Furthermore, she raised an accusation that any actual arrangement between them involved an unlawful attempt to procure or influence TSC employment for Ms. Tanui’s dependant, arguing such an agreement would be illegal and unenforceable.
The court, in its judgment delivered on August 7, 2026, found no substantiation for Ms. Mutai's allegations concerning an illegal scheme to secure TSC employment. The adjudicating magistrate stated, “No evidence whatsoever was tendered to support that allegation,” noting the absence of any agreement, communication, payment instructions, or other material to corroborate the claim that the money was linked to an improper influence over TSC hiring.
Ms. Tanui initiated the lawsuit in June 2026, seeking the refund, general damages for breach of contract, costs, and interest. She presented her M-Pesa statements, which unequivocally demonstrated the payments made to Ms. Mutai. While Ms. Mutai did not dispute receiving the money, she could not produce any written agreement, acknowledgment, receipt, or independent witness to support her assertion of having previously advanced Sh1.4 million to Ms. Tanui.
The court further observed that Ms. Mutai did not file a counterclaim for the alleged outstanding balance of Sh404,900 (the difference between her claimed Sh1.4 million loan and the Sh995,100 she received). The magistrate reasoned that a reasonable person, if truly owed such a sum, would pursue its recovery, thereby weakening Ms. Mutai’s defense that the M-Pesa payments were repayments for an earlier loan.
Ultimately, the court concluded that Ms. Tanui had successfully established the transfers, while Ms. Mutai failed to provide a legally sound basis for retaining the funds. The ruling underscores the critical role of digital transaction records like M-Pesa statements in resolving financial disputes in Kenya, often overriding unsupported verbal claims.
This report is based on information initially published by Business Daily.