The National Assembly has committed to the Public Petitions Committee a petition seeking an investigation into alleged unfair lending and asset financing practices by Mogo Auto Limited, following complaints by boda boda riders across the country.
The petition, presented by Kenya Bodaboda Riders and Owners Association National Executive Chairperson Charles Gichira, accuses the lender of imposing high interest rates and charges, inadequate disclosure of loan terms and aggressive recovery practices.
The petitioners want National Assembly to establish whether Mogo Auto complies with the legal and regulatory framework governing lending and asset financing, including requirements administered by the Central Bank of Kenya.
Is Mogo’s bodaboda lending practises unfair?
According to the petition, some borrowers have allegedly made substantial repayments, in some cases exceeding the value of their motorcycles, without ultimately acquiring ownership of the assets.
The petitioners further claim that motorcycles are repossessed immediately after default, while stolen assets equipped with tracking devices are allegedly not recovered. They also raise concerns over borrowers allegedly being pursued for repayment even after insurance compensation has been paid, resulting in adverse credit listings.
Additionally, the petition questions the company’s handling of customers’ personal data and the effectiveness of tracking devices, as well as procedures surrounding insurance claims and compensation following theft, loss or accidents.
“The Petitioner alleges that the company imposes excessively high interest rates and other charges, exposing borrowers to financial hardship and exploitation,” the Speaker told the House.
The petitioners further allege that efforts to resolve the grievances through the Departmental Committee on Finance and National Planning did not yield results, claiming Mogo Auto failed to attend committee sittings convened to address the complaints.
Predatory lenders in Kenya
Majority Leader, Kimani Ichung’wah called for firm action against predatory lenders.
“Predatory lenders who have taken advantage of our boda boda riders through exploitative lending practices must be stamped out, firmly regulated, and, where they operate outside the law, deregistered,” he said.
Speaker Wetang’ula urged the committee to establish whether Mogo, Watu Credit and similar firms are licensed and regulated by the Central Bank of Kenya.
“What you probably should check and inform the House is whether Watu Credit, Mogo and the other companies are licensed by the Central Bank of Kenya and, if they are, whether the Central Bank regulates them,” he said.
MP Joseph Cherorot said the Committee must ensure justice for affected riders and scrutinise other lenders accused of exploiting borrowers.
