Toyota Kenya has been sued for offering loans for purchase of cars above the legal cap on commercial lending rates.
Consumer Federation of Kenya (Cofek) claims that Tsusho Capital — the in-house financier for Toyota—has failed to drop the lending rates from 22 percent to 14 percent in line with the legal limits on lending rates.
Cofek wants Toyota Kenya Ltd made liable to compensate buyers who have been paying car loans using the high interest rates.
“Toyota Kenya Ltd, by virtue of ownership strings, must take responsibility for the same after compelling our clients to use Tsusho Capital Ltd as financiers,” says Cofek in court papers.
Tsusho Capital Ltd in defense said it’s not a bank regulated by the Central Bank of Kenya, and therefore not obligated to follow the interest rate cap set by the banking regulator.
“Tsusho operates solely on the principles of contract where it enters into a financing agreement with its customers on terms and conditions contained in the financing agreement the customer voluntarily executes,” says Tsusho in court papers.