Kenya’s “Buy Now, Pay Later” (BNPL) services are facing increased scrutiny following numerous complaints from borrowers, with Kigumo MP Kamau Munyoro calling for a formal investigation into BNPL schemes.
In a recent petition to Parliament, Munyoro, a member of the National Assembly’s Finance and National Planning Committee, raised concerns about the lack of regulation within these services, which allow consumers to purchase goods on credit and pay in installments.
According to Munyoro, one of his constituents lost a motorcycle despite paying KES 250,000 on a KES 260,000 loan. “I questioned how someone could pay so much and still lose the bike,” he said, highlighting how some BNPL firms operate without standard regulatory oversight and are reportedly setting their own interest rates. “When we summoned these companies, we found that they operated without proper regulations and set their own interest rates,” he added.
The MP pointed out that young Kenyans often rely on BNPL services to start small businesses, leading to quick contractual commitments without fully understanding the terms. “They don’t bring lawyers to read the fine print. Instead, they just sign wherever they’re told and leave with the bike,” Munyoro stated, emphasizing the urgency of regulatory measures to protect consumers from potential exploitation.
The Central Bank of Kenya (CBK) reported over 500 consumer complaints this year related to digital lending platforms, including BNPL services. Consumer protection advocates are concerned about the rising number of borrowers who may face financial setbacks, especially in asset financing for small businesses.
Among the firms involved is MOGO, an asset finance company that entered the Kenyan market in 2019. The company faced a fine of KES 11 million from the Competition Authority of Kenya (CAK) after a public investigation into its practices. The fine reflects concerns about transparency in contract terms and borrower rights.
