The National Assembly’s departmental committee on finance and national planning is considering enacting regulations to guide the operations of buy-now-pay-later (BNPL) credit providers, after the House raised concerns about the challenges faced by boda boda operators due to exploitative lenders.
The matter came to the committee’s attention after Kigumo MP Joseph Munyoro in February sought a statement from the chairperson on the measures the government had put in place to regulate the activities of BNPL providers in the country.
Munyoro further requested to know the plans by the government to develop alternative financing models that are fair, transparent and genuinely empower the boda boda operators.
On Thursday, April 11, 2024, the committee convened with the members of the Kenya Boda Boda Association, under the leadership of the national executive chairman Charles Gichira.
The meeting sought to get insights on the practice that the association asserted is rampant and may have impacted close to 50 per cent of those who have used the lending facilities.
The committee had earlier held a meeting with the governor of the Central Bank of Kenya over the matter.
The Boda Boda Association lamented that lenders had transformed what was promoted as an accessible route to motorcycle ownership and financial independence into a nightmare.
“The boda boda operators have gone through untold suffering. We have been lured by borrowers with deceitful deals of low-down payments and easy instalments.
“We have however discovered that what is presented as a good deal, has in fine print, details of hidden fees and exorbitant interest rates with aggressive debt collection tactics,” Mr Gichira explained.
He further expressed concerns that upon payment of deposits amounting to Sh40,000 which covers for insurance and a tracker, the lender remains with a copy of the motorcycle key and insurance details.
Members of the committee sought to know the name of the lending companies involved in the practice.
“I feel that we have all failed the boda boda sector. The lenders are operating in a vacuum and that’s why they have taken advantage of many unemployed young people. We also need the investigative agencies to probe the proneness of the loss of motorcycles just when the loanee is about to complete their payment. This is very unusual,” said Munyoro.
Committee chairperson Kuria Kimani assured the operators that they would get to the bottom of the matter.
“We shall be placing advertisements in the dailies next week requesting all those operators affected to come forward and submit their complaints. Since most operators may not access the dailies, I am requesting the Association Chairman to inform them,” Mr Kimani said.
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