Parliament committee summons 'Buy Now Pay Later' firms after exploitation complaints

The Committee, whose mandate cuts across key functions including public finance, monetary policy, financial institutions, and market competition, has expressed deep concern over reports of exploitation characterizing the sector.

During a Committee meeting today, Chairperson Kuria Kimani cautioned BNPL firms’ management that the Committee would not hesitate to invoke the provisions of Standing Order 191 if any invited BNPL entity fails to appear.

“The Committee is in receipt of several complaints from victims of exploitation. 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 stated.

Kimani also expressed concern that Mogo Auto Limited, one of the key firms operating in the sector that had been invited to engage with the Committee on the matter today, failed to turn up and instead requested a rescheduling of the meeting.

“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. We will 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 Committee is currently examining developments in motorcycle asset financing and BNPL arrangements, focusing on the applicability and effectiveness of existing regulatory frameworks and consumer protection safeguards.

The proposed engagements with these firms aim to apprise the Committee of their current regulatory compliance status and customer protection processes.

In particular, the lawmakers will seek detailed information regarding the BNPL firms' asset financing products, customer onboarding processes, current licensing, and regulatory compliance status, including their engagements with the Central Bank of Kenya (CBK) and other relevant regulatory authorities.

The Committee, which is also slated to meet with the regulator, the Central Bank of Kenya, will review the firms’ account management systems, payment reconciliations, customer statements, and communication protocols regarding arrears or account modifications.

Additionally, the lawmakers will seek to acquaint themselves with procedures governing loan defaults, notices, asset recovery or repossession, the valuation and disposal of recovered assets, and the application of sale proceeds.

Other core areas under review include complaint-handling mechanisms, customer redress and escalation pathways, and the oversight of agents or third-party service providers. 

The Committee will also explore any operational or regulatory challenges and seek recommendations to strengthen regulatory clarity and consumer protection moving forward.