General Terms (Kenya)

General Terms (Version 3.0, as approved by Watu Credit Limited on 23 January 2024)

These General Terms shall be read together with the Special Terms, and together they constitute the Loan Agreement. Terms defined in the Special Terms have the same meaning in these General Terms unless given a different meaning in these General Terms.

1. Purpose of the Loan

1.1. The Loan Amount is used as part of the Vehicle Price payment. The Borrower hereby requests and authorises the Lender to transfer the Vehicle Price amount (which consists of Loan Amount and Downpayment) directly from the Lender to the Seller of the Vehicle according to the Seller’s invoice.

1.2. The Loan Amount is issued for the Term set out in the Special Terms and shall be repaid in weekly instalments together with the Interest and any other applicable payments, fees or Late Interest according to the terms below.

1.3. The Vehicle is selected by the Borrower, and the Lender is not liable by any contract to deliver the Vehicle or to service or maintain it or to provide any other services related to the Vehicle.

1.4. The Borrower is the beneficial owner of the Vehicle with full rights of ownership and control. The Lender has appointed Watu Nominees Company Limited, company number PVT-EYU9KBL (the “Lender’s Nominee”) as its agent for the purpose of registering the legal ownership of the Vehicle so as to protect the Lender’s security interest in the Vehicle. The Borrower and the Lender hereby agrees for the Vehicle to be registered under joint names of the Borrower and the Lender’s Nominee or the Lender’s Nominee’s name. Lender’ Nominee is only registered as the legal owner for purposes of securing the Lender’s interest in the Vehicle, but the beneficial owner has all possessory rights and derives all the benefits of the use of the Vehicle and has exclusive rights over the control and is responsible for all the liability that may attach to the Vehicle exclusively by virtue and use of the Vehicle. The Vehicle is understood to include each and every component part thereof; all replacements, renewals or additions to and substitutions for the Vehicle from time to time made are an integral part of the Vehicle and shall become the property of the owners of the Vehicle subject to this Loan Agreement.

1.5. The Lender agrees to procure that the Lender’s Nominee transfers its legal ownership interest (as defined hereinbefore) in the Vehicle, and the Borrower agrees to acquire the Lender’s Nominee’s ownership interest in the Vehicle upon full repayment of the Loan Amount, Interest and any other applicable payments or fees under the present Loan Agreement.

1.6. In order to secure the repayment of the Loan Amount, Interest and any other applicable fees and payments, Security Agreement shall be registered in the name of the Borrower in favour of the Lender over the Vehicle described in Special Terms according to the terms of Security Agreement which forms an integral part of the present Loan Agreement.

2. Commencement and Duration

2.1. This Loan Agreement shall commence on the Initial Disbursement Date (being the date when the Seller has made the Vehicle available to the Borrower on the basis of received payment from the Lender) and terminate on the Expiry Date (being the date of receipt of the final payment under the present Loan Agreement).

3. Ownership and restrictions on the Vehicle

3.1. The Borrower shall be the beneficial owner of the Vehicle, subject to the Lender’s security interest in the Vehicle pursuant to the Security Agreement.

3.2. The Borrower will become registered legal and beneficial owner of the Vehicle once the Borrower has fully repaid the Loan Amount, Interest and any other applicable payments or fees under the present Loan Agreement in full and has performed all the duties according to the Loan Agreement.

3.3. For duration of the Loan Agreement, except with the prior written consent of the Lender, the Borrower is not allowed to sell, offer for sale, let, hire out, assign, charge, encumber or in any way deal with or dispose of the Vehicle, remove or permit the removal of the Vehicle outside Kenya or attempt to do any of these things.

3.4. The Borrower shall make sure the Vehicle is safe, kept in good condition, and used correctly and in conformity with any applicable laws and manufacturer’s instructions, and shall arrange any maintenance that is needed; any replacement parts become the joint property of the Lender and the Borrower. The Borrower shall operate the Vehicle and undertake its activities strictly in compliance with the laws of Kenya and legal requirements of the Government of Kenya and relevant municipalities of operation.

3.5. Any damage, loss or injury to anything or anyone, caused to or by the Vehicle or by its use is Borrower’s risk. Any penalties, fines or liabilities arising in respect of the use or possession of the Vehicle or the carriage of any persons are Borrower’s responsibility.

The Borrower agrees to indemnify the Lender and the Lender’s Nominee in case of any claims.

3.6. The full risk regarding loss or damage to the Vehicle, whether attributable to irresistible force, inevitable accident or any other cause is passed to the Borrower. The Lender shall not be liable for any loss or damage caused by any defect in or arising out of the Vehicle. The Borrower hereby indemnifies the Lender and the Lender’s Nominee from all claims, damages, losses, penalties and, fines in relation to the Vehicle and the use of the Vehicle.

3.7. The Lender is allowed to inspect the Vehicle at any time.

3.8. The Lender has the rights to fit the Vehicle with a GPS / GSM tracking device for the purposes of securing the Loan repayment and safety of the Loan collateral. The Borrower shall not remove, interfere, damage, make any alterations to the tracking device and the Borrower hereby authorises the Lender at the Lender’s discretion to control or switch off the Vehicle remotely. Any breach of this clause by the Borrower will constitute an event of default and result in Borrower’s immediate obligation to repay the entire Repayment Amount. The tracking device is property of the Lender.

3.9. In case of any major incident involving the Vehicle or the Borrower (e.g. accident, fatality, injury, arrest, etc.), the Borrower shall immediately and no later than within 48 hours after its occurrence, inform the Lender by calling Watu Credit Customer Care, whose phone number is available at

3.10. The Borrower hereby expressly agrees to provide the necessary authorisations, either in writing or through a telephone call, to the Lender to open NTSA (Kenya National Transport and Safety Authority) account in the Borrower’s name and on the Borrower’s behalf to process any necessary changes in the motor vehicle registration certificate (logbook).

4. Repayment of the Loan and Interest

4.1. The Borrower shall repay the Loan within a time period indicated in the Special Terms. The Loan shall be repaid by weekly instalments starting one week from the Initial Disbursement Date.

4.2. In consideration of the Lender granting to the Borrower the Loan, the Borrower shall pay the Lender the interest at the Interest Rate indicated in the Special Terms (the “Interest”). Interest will be calculated on a declining balance basis payable weekly.

4.3. For the purposes of this Loan Agreement, the total interest is calculated based on the applicable monthly interest rate. The weekly repayment instalment is calculated by dividing the sum of Loan principal and Interest amount by the actual number of weeks the Loan is issued for. The sum of weekly repayments shall be equal to the total Loan principal and Interest as set out in this Loan


4.4. Each weekly payment shall be made on the same day in each subsequent week.

4.5. Total Repayment Amount as stated in the Special Terms includes the Loan Amount and Interest (but excludes any Late Interest for late payments or other applicable fees). Lender shall in addition to the Repayment Amount be entitled to the payment of other applicable fees as set out in the Special Terms.

4.6. The Borrower shall make all payments due to the Lender in respect of the Loan, including but not limited to the Interest, Late Interest and other fees, using the M-PESA Service into the Pay Bill Account notified by the Lender.

4.7. The Borrower may repay the Loan at any time before the due date subject to 7 (seven) days’ written notice to the Lender. The Lender shall calculate the Total repayment amount for final settlement.

4.8. If the Borrower fails to repay the Loan and/or Interest or any other sum due or owing by the Borrower to the Lender the Borrower will be charged the Late Interest of 0.5% daily form any outstanding amount.

4.9. In addition to the Late Interest the Lender may apply a Collection charge of 5,000 Kshs (five thousand Kenyan shillings) to cover internal recovery expenses if the Borrower is in arrears for more than 10 (ten) days. The Borrower acknowledges, agrees and confirms that the aforesaid late payment Collection charge represents a reasonable pre-estimate of the loss to be suffered by the Lender. This collection charge does not cover any external recovery expenses which will be payable by the Borrower separately.

4.10. The Lender shall apply all payments received under this Loan Agreement in following order: 1) fees and expenses payable under this Loan Agreement, 2) accrued and unpaid Late Interest, 3) Interest, 4) the principal (Loan Amount).

4.11. If any payment hereunder would otherwise be due to be made on a day which is not a business day in Kenya, it shall be made on the next succeeding business day.

4.12. If at any time it is unlawful or contrary to any request from or requirement of any central bank or other fiscal, monetary or other authority, for the Lender to make, fund or allow to remain outstanding all or any part of the Loan Amount, then if the Lender so requires, the Borrower shall on such date as the Lender specifies repay the Loan Amount together with accrued Interest on it and any other amounts then due to the Lender hereunder.

4.13. If the Borrower has elected to use the services of Watu Driving School Limited, company number PVT-9XUGLY9K, and requested that the school tuition is added to the Loan Amount, the relevant tuition is indicated in the Special Terms. The Borrower hereby authorizes the Lender to transfer the school tuition to the Watu Driving School Limited directly, however, insofar that the Borrower is not in arrears on the Loan, Interest and fees payments. Use of Watu Driving School Limited services is subject to the school’s internal rules and procedures.

5. Payment Fees and Taxes

5.1. The Borrower is responsible for all applicable tax payments, including deduction of any withholding tax.

5.2. All M-PESA Transaction Fees payable in connection with the repayment of Loan, Interest, Late Interest, Collection charge or other applicable fees shall be borne by the Borrower.

5.3. The Borrower shall indemnify the Lender on a full and unqualified indemnity basis against:

(a) any legal charges including, without limitation, advocate and client costs incurred by the Lender in obtaining legal advice in connection with the Loan, related to the Borrower’s dealings with the Lender or incurred by the Lender in any legal, arbitration or other proceedings arising out of any dealings in respect of the Loan; and

(b) all other fees, expenses and taxes, duties, impositions and expenses incurred in respect of the Loan, including as a consequence of the occurrence of any Event of Default.

5.4. The certificate of the Lender as to the amount of such indemnified loss or expense shall be conclusive.

5.5. The Borrower hereby agrees to pay all costs, charges and expenses incurred by the Lender in obtaining or attempting to recover the Loan, Interest, Late Interest or any other sum due from the Borrower, including the costs of Vehicle repair following the Event of Default and Vehicle repossession according to the Security Agreement.

5.6. All payments due from the Borrower hereunder shall be made free and clear of and without deduction for or on account of any present or future taxes. If at any time, any regulatory or any taxing authority requires the Borrower to make any deduction or withholding in respect of taxes from any payment due from them for the account of the Lender, the sum due from the Borrower in respect of such payment shall be increased to the extent necessary to ensure that, after the making of such deduction or withholding, the Lender receives a net sum equal to the sum which the Lender would have received had no such deduction or withholding been required to be made and the Borrower shall indemnify the Lender against any losses or costs incurred by the Lender by reason of any failure of the Borrower to make any such deduction or withholding.

6. Vehicle insurance

6.1. Upon signing the present Agreement the Borrower arranges a comprehensive insurance cover for the Vehicle from the insurance company of their choice at their own cost. The insurance cover shall remain in force throughout the duration of the present Agreement. The insurance cover shall indicate the Lender as the first loss payee.

6.2. The Borrower shall use the Vehicle in strict compliance to the terms of the insurance policy.

6.3. If the Vehicle has a total loss or it is stolen, the Borrower shall immediately inform the Lender, and the Lender may either require the Vehicle to be replaced or request the Borrower to pay the full Repayment Amount required to discharge the Borrower’s outstanding liabilities.

6.4. The Borrower authorises the Lender to contact the insurer and, if the Vehicle has a total loss or it is stolen, consent to disclosing the amount required to discharge Borrower’s outstanding liabilities to the Lender. The Borrower appoints Lender as his agent to negotiate and agree with the insurer the terms of any insurance claim in respect of the Vehicle and to receive any insurance payout.

6.5. If any insurance cover fails to cover Borrower’s liability to the Lender, the Borrower remains liable to the Lender for any shortfall.

7. Events of Default

7.1. The Lender may, without prejudice to its other rights under the this Loan Agreement and Security Agreement, terminate its obligation to make the Loan Amount available and declare the Loan Amount together with the full Interest amount and other applicable payments and fees under this Loan Agreement immediately (or in accordance with such declaration) is repayable on demand if any of the following events occur:

(a) any weekly instalment or any other amount due under the Loan Agreement is not paid on the due date; or

(b) the Borrower fails to perform any of the Borrower’s obligations under this Loan Agreement or the Security Agreement (including but is not limited to the operation of the Vehicle outside designated district of operation, or operation of the Vehicle contrary to the terms of insurance policy or applicable laws, involvement in illegal activities); or

(c) the Borrower defaults under any loan agreement, facility letter or other agreement or obligation relating to borrowing; or

(d) any representation, undertaking, statement or warranty made by the Borrower pursuant to this Loan Agreement and the Security

Agreement is incorrect; or

(e) if an order is made for the bankruptcy or insolvency of the Borrower or the Borrower becomes insolvent or is unable to pay his debts, or a receiver is appointed of the whole or any material part of the assets of the Borrower; or

(f) the Security Agreement securing the Loan Amount (or any part thereof) now existing or hereafter created becomes unenforceable or becomes invalid; or

(g) any license, authorization, consent or registration at any time necessary or desirable to enable the Borrower to comply with the Borrower’s obligations to the Lender hereunder shall cease to remain in full force and effect; or

(h) any breach occurs of the terms and conditions of the Security Agreement;

(i) it becomes unlawful or impossible for the Lender to maintain the Loan in effect;

(j) the Borrower had removed, interfered, damaged, or made any alterations to the GPS tracking device;

(k) Any judgment or order is made against the Borrower which is not complied with within seven (7) days.

7.2. If an Event of Default occurs, the entire Repayment Amount then outstanding together with the full Interest amount thereon and any other payments or fees shall immediately become due and payable to the Lender and the Lender shall cease to be under any further commitment to the Borrower, and the Lender shall be entitled at its option to sue for the repayment of the Repayment Amount (or so much thereof as shall be outstanding) and enforce the payment thereof and/or enforce the powers rights and privileges conferred on the Lender by the Security Agreement.

8. Representations and Warranties

8.1. The Borrower hereby represents and warrants to the Lender as at the date hereof:

(a) the Borrower has full right of title and power to assign and transfer the Collateral (as defined in the Security Agreement) to the Lender and that the Collateral is not subject to any encumbrance;

(b) the Borrower’s obligations under this Loan Agreement will constitute valid and binding obligations of the Borrower enforceable in accordance with their respective terms;

(c) the Borrower is not in default in respect of any other indebtedness (including obligations under guarantees and indemnities) and the borrowing and repayment of the Loan Amount will not contravene any existing applicable law or regulation or any contractual or other restriction or limitation binding on the Borrower;

(d) any information the Borrower has provided to the Lender was, when given, true and no change has occurred since the date the information was supplied which renders it inaccurate; and

(e) no insolvency or bankruptcy proceedings have been commenced against the Borrower or to the best of the Borrower’s knowledge threatened against the Borrower.

8.2. These warranties shall be deemed repeated by the Borrower on and as of each day that there are monies due to the Lender hereunder are outstanding.

8.3. By accepting this Loan Agreement the Borrower undertakes to the Lender that until all monies owing hereunder have been repaid in full and confirmed by the Lender in writing/SMS, the Borrower:

(a) without the prior written consent of the Lender will not initiate or consent to the commencement of any bankruptcy, insolvency or analogous proceedings in respect of the Borrower;

(b) will not approve any agreement to license, lease, sell or create any Encumbrance over the Collateral;

(c) will supply the Lender with all the information, confirmations and documents referred to in this Loan Agreement and such other information, confirmations and documents that the Lender may require;

(d) indemnify and keep the Lender and the Lender’s Nominee fully and effectually indemnified (on a full and unqualified indemnity basis) from and against all actions, proceedings, costs, claims, liabilities, taxes, charges, expenses and demands whatsoever occasioned from the use and/or beneficial ownership of the Vehicle; by any Event of Default or any breach or non-observance of any of the covenants, stipulations or warranties on the part of the Borrower contained in this Loan Agreement.

9. Variation and Termination of Relationship

9.1. The Lender may at any time, upon 7 (seven) days’ notice to the Borrower, terminate or vary its business relationship with the Borrower, and in particular the Lender may cancel or call in the Loan which it has granted and require the repayment of outstanding debts resulting therefrom within such time as the Lender may determine.

10. Disclosure of Information

10.1. In order for the Lender to assess the Loan application and to provide the Loan, the Borrower provides the Lender with certain personal information including but not limited to: name, address, telephone, date of birth, PIN, income details, copy of ID document

(“Personal Information”).

10.2. By signing this Loan Agreement the Borrower hereby consents and authorises the Lender to collect, process, store and transfer the Borrower’s personal information, and data relating to the Loan application, the Loan, the Repayment details, Vehicle GPS location and any other data or details within the limits permitted by law. The permitted uses may include:

(a) in order to provide the Lender’s services to the Borrower;

(b) in order to perform the Lender’s obligations under this Loan Agreement;

(c) prevention, detection, investigation or prosecution of criminal activities or fraud;

(d) exchange of information with the Lender’s service providers, dealers, agents, assignees or any other company that may be or become the Lender’s subsidiary or holding company for reasonable commercial purposes relating to the Services;

(e) to and from a Credit Reference Bureau to obtain Borrower’s credit report;

(f) to the Lender’s lawyers, auditors or other professional advisors;

(g) any court or arbitration tribunal in connection with any legal proceedings;

(h) for reasonable commercial purposes related to financing, such as marketing and research related activities; and

(i) in business practices including but not limited to quality control, training and ensuring effective systems operation.

10.3. The Borrower hereby agrees and authorises the Lender to obtain and procure Personal Information contained in the IPRS from the Government of Kenya and the Borrower further agrees and consents to the disclosure and provision of such Personal Information by the Government of Kenya to the Lender.

10.4. The Borrower hereby expressly consents and authorises the Lender to request and receive any credit history data about the Borrower from a Credit Reference Bureau.

10.5 The Lender undertakes that it will duly observe its obligations as a data controller under the Data Protection Act, 2019 which arise in connection with the collection and processing of the Personal Information.

11. Assignment and Appointment of Attorney

11.1. The Borrower agrees that the Lender may at any time assign and transfer all or any part of its rights or obligations under the Loan Agreement and the Security Agreement to any person. After any such assignment and transfer the expression the “Lender”

shall be deemed to include such assignee(s) to the extent of their respective participations.

11.2. The Borrower shall not, without the prior written consent of the Lender, assign or transfer any of his rights or obligations or benefits under the Loan Agreement and the Security Agreement to any person.

11.3. The Lender may disclose to any person to which the Lender is assigning or transferring its rights or obligations such information about the Borrower as the Lender shall consider necessary in the circumstances.

11.4. The Borrower hereby irrevocably appoints the Lender to be the attorney of the Borrower and in the name and on behalf of the Borrower to execute and do any assurances, acts and things which the Borrower ought to execute and do under the covenants and agreements herein contained and generally to use the name of the Borrower in the exercise of all or any of the powers hereby or by law conferred on the Lender.

12. Notices

12.1. Any notice, demand or other communication served on the Borrower by the Lender under or in connection with this Loan Agreement shall be made in writing and, unless otherwise stated and to the extent permitted by law, may be given or made by letter, mobile text message (SMS), e-mail or through an advertisement in a newspaper with national circulation.

12.2. Save as otherwise expressly provided herein and to the extent permitted by law, any such notice, demand or other communication shall be deemed to have been properly served on the Borrower by the Lender when served in any one or more of the following ways:

(a) if by way of letter and sent by personal delivery, upon delivery at the physical address of the Borrower; or

(b) if by way of mobile text message (SMS) on the next working day after transmission; or

(c) if by way of letter and sent by registered post, seven (7) days after the date of posting provided that proof is given that the notice

was properly addressed and duly dispatched by registered post; or

(d) if by way of e-mail, on receipt of a confirmation of receipt by the receiver and in any event, on the next working day after transmission; or

(e) if by way of advertisement in a newspaper with national circulation, on the date of publication of the newspaper.

12.3. The relevant address, mobile telephone number and email address of the Borrower for any notice, demand or other communication to be served on the Borrower under or in connection with this Loan Agreement is as indicated in the Special Terms.

13. Miscellaneous

13.1. No failure or delay by the Lender in exercising any right, power or privilege shall impair the same or operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege preclude any further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies herein provided are cumulative and not exclusive of any rights and remedies provided by law.

13.2. A certificate by an officer of the Lender as to the amounts outstanding under this Loan Agreement for the time being shall, save in the case of manifest error, be binding and conclusive upon the Borrower.

13.3. Any waiver of any right under this Loan Agreement is only effective if it is in writing and it applies only to a party to whom the waiver is addressed and the circumstances for which it is given and shall not prevent a party which has given the waiver from subsequently relying on the provision it has waived.

13.4. Until all amounts owing to the Lender have been paid or satisfied in full the Lender shall have a lien on all the property and assets of the Borrower from time to time in the Lender’s possession and a charge over the Collateral from time to time registered in the name of the Lender or its nominees whether the same be held for safe custody or otherwise.

13.5. If at any time any provision of this Loan Agreement is or becomes illegal, invalid or unenforceable in any respect under the law, the legality, validity and enforceability of the remaining provisions of this Loan Agreement shall not in any way be affected or impaired thereby.

13.6. The parties agree that this Loan Agreement constitutes the whole and entire agreement between the parties relating to the Loan Amount and supersedes and extinguishes any prior agreements, undertakings, representations, warranties and arrangements of any nature whatsoever whether or not in writing relating to the Loan Amount.

13.7. No amendment to this Loan Agreement shall be effectual or binding on the parties unless it is in writing and duly executed by or on behalf of each of the parties.

13.8. In the event that any provision of this Loan Agreement shall be inconsistent with any provision contained in the Security Agreement, the relevant provision of the Security Agreement will prevail and such inconsistent provision of this Loan Agreement shall be construed and read as subject to the relevant provision in the Security Agreement.

13.9. Any change in the constitution of the Lender or its absorption in or merger with any other person or the acquisition of all or part of its undertaking by any person shall not in any way prejudice or affect its rights hereunder.

13.10. Words denoting the singular number shall include the plural and vice versa.

13.11. This Loan Agreement shall be governed by the laws of the Republic of Kenya, and parties’ consent and submit to the

jurisdiction of the courts of law of Kenya in respect of all or any claims arising under this Loan Agreement.

13.12. These General Terms of the Loan Agreement are made available at the Lender’s office and are available on the Lender’s

website at The General Terms version which is effective on the date of signing of the Special Terms shall apply

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