Kenya MPs Invite Boda Boda Operators Who Lost Motorcycles To Submit Complaints Over Rogue Lenders

• There have been theft complaints from Kenyans who accessed motorcycles on credit from various lenders in the country
• Kenya Boda Boda Association national executive chairman Charles Gichira raised concerns to members of parliament
• Gichira revealed that close to 50% of members who took motorcycles from lenders on credit were affected
• The MPs invited the affected boda boda operators to submit their complaints as they formulate regulations to root out rogue lenders

Members of parliament have called for legislation in the lending sector to protect boda boda operators from exploitative lenders.

The National Assembly’s Departmental Committee on Finance and National Planning invited victims of motorcycle theft that happened during or after servicing their loans to submit complaints.

The committee, led by Molo MP Kimani Kuria, said it will enact regulations to guide the operations of the Buy-Now-Pay-Later (BNPL) credit providers following complaints reported to the House.

Why MPs want to regulate boda boda lending sector

Kigumo lawmaker and committee member Joseph Munyoro, in February 2024 sought directions on the measures and mechanisms the government has put in place to regulate the activities of BNPL providers in the country.

Munyoro further requested to know the plans the government has put in place to develop alternative financing models that are fair, transparent, and genuinely empower the boda boda operators.

The committee met the Central Bank of Kenya governor Kamau Thugge over the matter and, on Thursday, April 11, engaged the members of the Kenya Boda Boda Association led by the national executive chairman, Charles Gichira.

How many boda boda operators on credit have lost bikes?

Gachira noted that the lenders' action may have affected close to 50% of those who have used their credit facilities.

The committee, which represents over 2 million operators across the county, decried that the lenders have turned what was marketed as an accessible path to owning a motorcycle and achieving financial independence into a nightmare.

The chair said that many operators are now counting losses after their motorcycles were indiscriminately impounded, even when they had less than 10% outstanding loans.

“Hon. Chairman, 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," Gichira explained.

He lamented that upon payment of deposits amounting to KSh 40,000—for insurance and a tracker—the lender remains with a copy of the motorcycle key and insurance details.

Faith Asiba, the association chairlady, noted the rising cases of motorcycle theft are reported when the loanee is about to complete payment.

Asiba said this led to suspicions that there was a connection between those who steal the motorcycles and the lenders.

“It’s quite suspicious that most of those who have lost their motorcycles, including half of us here today, have lost them at night, and when we call the companies to deploy the trackers, they do not respond until morning, when the trackers have most likely been disabled. Unfortunately, the insurance companies have not been offering compensation in such cases," said Asiba.

MP 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,” Kimani told the operators.

The Committee said it will engage the Competition Authority of Kenya (CAK) and the Insurance Regulatory Authority to get insights on how to tighten regulations that govern the lenders.

CBK licenses digital lenders

This came after the Central Bank of Kenya (CBK) raised an alarm, saying at least 400 mobile lenders are operating without a licence.

CBK licenced only 32 Digital Credit Providers (DCPs) in March 2023 out of the 480 that applied in March 2022.

The regulator licensed an additional 19 mobile loan lenders, summing the number of registered DCPs to 51.

Proofreading by Jackson Otukho, a multimedia journalist and copy editor at TUKO.co.ke