MPs launch probe into motorcycle financing firms over consumer exploitation claims

MPs launch probe into motorcycle financing firms over consumer exploitation claims - Boda boda riders waiting for customers at a city picking up point. (Photo: File)

The review will examine the licensing status of BNPL firms, their regulatory compliance, and their engagement with the Central Bank of Kenya (CBK) and other relevant authorities.

Members of Parliament (MPs) have launched a probe into the Buy Now, Pay Later (BNPL) and motorcycle asset financing sector amid mounting complaints of consumer exploitation, warning that firms that fail to honour parliamentary invitations could face action under Standing Order 191.

The National Assembly’s Departmental Committee on Finance and National Planning is reviewing the regulatory framework governing the sector to determine whether existing safeguards adequately protect consumers.

Committee Chairperson Kuria Kimani said the Committee had received several complaints from customers and would require firms to account for their operations.

“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.

He also expressed concern over the failure of Mogo Auto Limited to attend a scheduled meeting with the committee, noting that the company had requested a postponement.

“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.

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Kimani warned that the Committee would consider invoking Standing Order 191 to ensure invited firms appear before it.

“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 review will examine the licensing status of BNPL firms, their regulatory compliance, and their engagement with the Central Bank of Kenya (CBK) and other relevant authorities.

Legislators will also scrutinise customer onboarding, account management, payment reconciliation, customer statements, and communication regarding arrears or account changes.

Other areas of focus include loan defaults, notices, asset repossession, valuation and disposal of recovered assets, as well as the application of proceeds from asset sales.

The Committee will further examine complaint-handling mechanisms, customer redress procedures, and the oversight of agents and third-party service providers.

The CBK is also expected to engage with the Committee as part of the review, which seeks to identify regulatory gaps and recommend measures to strengthen consumer protection in the sector.