How M-Pesa trail settled friendship loan row

The small claims court has ordered a woman to refund her friend Sh995,100 borrowed to secure employment with the Teachers Service Commission (TSC).

The court also awarded Lucy Tanui Sh67,000 in costs and interest after Sharon Mutai failed to explain why she retained the money even though M-Pesa records proved she received the amount.

The dispute arose from cash transfers made between April and May 2025, when Ms Tanui sent Ms Mutai various amounts totalling Sh995,100. Ms Tanui said the money was to be refunded, but the borrower gave a different account of the transactions.

Ms Mutai told the court that no contract existed between them and that the transfers were repayments of a Sh1.4 million cash loan she had earlier given Ms Tanui in 2024. She said that the sums transferred by the claimant constituted repayments of that earlier advance by instalments.

She also alleged that any arrangement between them involved an attempt to procure or influence employment with the Teachers Service Commission for Ms Tanui’s dependant.

Ms Mutai argued that such an arrangement would have been illegal, void and unenforceable. She, however, did not produce an agreement, communication, payment instructions or other evidence showing that the money transferred by Ms Tanui was connected to securing, purchasing or influencing TSC employment.

The court found no evidence connecting the disputed transfers to a scheme to secure TSC employment.

‘No evidence whatsoever was tendered to support that allegation,’ the adjudicating magistrate said in the judgment on August 7, 2026.

The court said it had not been presented with ‘any agreement, communication, payment instructions or any other material’ showing that the two women had agreed to secure, purchase or improperly influence TSC employment.

The allegation therefore remained unsubstantiated, the magistrate ruled.

Ms Tanui had sued Ms Mutai in June 2026 seeking the refund, general damages for breach of contract, costs and interest.

She produced her M-Pesa statements showing the payments made to Ms Mutai on different dates. The court said the records ‘collectively confirm that a total sum of Sh995,100 was remitted to the respondent.’

Ms Mutai did not dispute receiving the money. Instead, she maintained that the transfers represented instalment repayments for the earlier Sh1.4 million cash advance.

But she produced no written agreement, acknowledgement, receipt or witness to support the alleged cash transaction.

The magistrate said that apart from Ms Mutai’s ‘bare assertions’, no documentary evidence or independent testimony proved that she had advanced Ms Tanui the money.

The court noted that Ms Mutai did not file a counterclaim for the alleged unpaid balance of Sh404,900.

‘If indeed she had advanced Sh1.4 million and had only recovered Sh995,100, one would reasonably expect her to pursue the outstanding balance,’ the court said.

That omission weakened Ms Mutai’s claim that the M-Pesa payments were repayments of an earlier loan, according to the judgment.

The court found that Ms Tanui had established the transfers while Ms Mutai had failed to provide a credible legal basis for retaining the money.

‘The evidential burden having shifted to the respondent, she failed to discharge it,’ the magistrate said.

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