Nairobi, May 10 -- The High Court in Eldoret has ruled that consumer protection laws cannot be used to avoid valid loan obligations after default, in a judgment that strengthens the hand of micro-lenders in disputes over costly asset-backed loans.

The court held that a borrower cannot invoke consumer protection provisions to avoid obligations under a loan agreement he or she voluntarily signed, especially after admitting default.

It said freedom of contract remains a cornerstone of Kenyan commercial law and that parties are bound by their terms unless there is proof of fraud, illegality or unconscionable conduct.

The court dismissed an appeal by borrower Ahmed Abubakar and upheld a Small Claims Court decision allowing micro-lender Mome...