Mogo responds to CAK ruling, says it stopped issuing dollar loans in May

Asset financier Mogo has issued a statement in response to a recent ruling by the Competition Authority of Kenya (CAK), which found the company liable for false and misleading representation toward its customers.

The CAK ordered MOGO to pay a penalty of Ksh.10.9 million and refund three customers a total of Ksh.344,939 for excess charges related to dollar-denominated loans.

The investigations were initiated after complaints from four customers between May 2023 and April 2024, highlighting concerns over discrepancies in exchange rates and the company’s loan practices.

In its rejoinder, Mogo expressed its commitment to prioritizing customer welfare and transparency while at the same time acknowledging challenges faced by some customers due to currency fluctuations that affected their loan repayments.

Mogo clarified that less than 15% of its customers chose dollar-denominated loans, which were designed to offer lower interest rates compared to Kenyan Shilling loans.

"Less than 15% of all Mogo customers by free choice had taken dollar-denominated loans. Unfortunately, due to currency fluctuations, loan repayment amounts for part of such customers increased. When complaints were raised through CAK, Mogo decided to enter into a settlement agreement with the CAK and the complainants," the statement reads.

However, the company recognized the impact of these loans on affected customers and has decided to halt the issuance of new dollar-denominated loans as of May 2024.

"It is important to note that the settlement agreement means a goodwill settlement by Mogo rather than Mogo being fined for wrong behavior due to dollar-denominated loans being fully legal as per regulatory framework to which Mogo adheres in Kenya. Mogo has also made a decision to stop issuing new dollar denominated loans in Kenya since May 2024."