MPs launch probe into Mogo, Buy Now Pay Later firms over consumer exploitation
Parliament has launched an investigation into Buy Now, Pay Later (BNPL) providers and motorcycle asset financing companies amid mounting complaints of consumer exploitation, warning that firms that ignore summonses could face action.
The National Assembly’s Departmental Committee on Finance and National Planning is reviewing the regulatory framework governing the sector to establish whether existing safeguards adequately protect consumers from unfair lending practices, disputed accounts and questionable asset repossession procedures.
Committee Chairperson Kuria Kimani said legislators had received complaints from customers and would require companies to demonstrate compliance with applicable laws and regulatory requirements.
“As we move to review the regulatory safeguards governing the sector, we will require all firms in this sector to demonstrate to the committee that their operations strictly follow the laid down safeguards,” Kimani said.
The inquiry comes amid growing scrutiny of financing arrangements that allow customers to acquire motorcycles and other goods through instalment payments, with concerns over how lenders manage arrears, communicate outstanding balances and repossess financed assets.
Kimani singled out Mogo Auto Limited over its failure to attend a scheduled meeting with the Committee after requesting that the session be postponed.
The company had been invited to respond to concerns raised by various stakeholders regarding its operations and the wider asset financing sector.
“Recently, the Committee received representations from various stakeholders detailing their experiences within the sector. This is why we had invited Mogo Auto to shed light on the matter. They, however, requested the meeting to be deferred,” he said.
The chairperson warned that Parliament could invoke Standing Order 191 to compel invited firms to appear before the Committee.
“We will, however, not hesitate to invoke the provisions of Standing Order 191 to ensure that all firms invited to shed light on this matter honour the invitations,” he stated.
The probe will examine the licensing status of BNPL providers, their compliance with regulatory requirements and their engagement with the Central Bank of Kenya (CBK) and other relevant authorities.
Lawmakers will also scrutinise customer onboarding, account management, payment reconciliation, customer statements and communication about arrears or changes to accounts.
Particular attention will be paid to loan defaults, repossession notices, asset valuation and disposal, and how proceeds from the sale of recovered assets are applied to outstanding debts.
The committee will further assess complaint-handling mechanisms, customer redress procedures and the oversight of agents and third-party service providers.
The CBK is expected to engage with legislators during the review, which seeks to identify regulatory gaps and recommend reforms to strengthen consumer protection and accountability across the sector.
