MPs mull protections for boda boda operators from loan sharks » Capital News
NAIROBI, Kenya Apr 12 – The National Assembly’s Departmental Committee on Finance and National Planning is considering enacting regulations to guide the operations of the Buy-Now-Pay-Later (BNPL) credit providers after the plight of boda boda operators at the hands of exploitative lenders was raised in the House.
The matter came to the Committee’s fore after Kigumo lawmaker and Committee Member Joseph Munyoro in February 2024 sought a statement from the Committee Chairperson.
Munyoro was particularly concerned with knowing the measures and mechanisms the government has put in place to regulate the activities of BNPL providers in the country, including addressing rogue lending institutions responsible for violating consumers’ rights.
Seeking the statement on the floor of the House Munyoro further requested to know the plans the government had put in place to develop alternative financing models that are fair, transparent, and genuinely empower the boda boda operators.
The Committee which has already met the Central Bank of Kenya Governor over the matter on Friday engaged the members of the Kenya Boda Boda Association led by the National Executive Chairman Charles Gichira, to get insights on the practice the association says is rampant and may have affected close to 50 percent of those who have used the lending facilities.
Making their submissions to the Committee, the team which said they represent over 2 million operators across the county, decried that the lenders have turned what was marketed as an accessible path to owning a motorbike and achieving financial independence, as a nightmare.
They noted that many operators are now counting losses after their motorcycles were indiscriminately impounded even when they had less than 10 percent outstanding loans.
“The boda boda operators have gone through untold suffering. We have been lured by borrowers with deceitful deals of low-down payments and easy installments,” Gichira explained.
He further expressed concerns that upon payment of deposits amounting to Sh40,000 that caters for insurance and a tracker, the lender remains with a copy of the motorcycle key and insurance details.
Faith Asiba, the association Chairlady observed that the influx of motorcycle theft cases when the loanees are about to complete payment has led to suspicions that there is a relationship between those who cause the disappearance of 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,” she told the Committee.
Weighing into the matter, the members sought the names of the lending companies involved in this exploitation.
Munyoro called on the Committee to consider effecting a regulator framework that will shield the operators from exploitative tendencies that are akin to criminal acts.
“I feel that we have all failed the boda boda sector. 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,” he observed.
Confirming that the Committee is seized of the matter, the Committee Chairperson Kuria Kimani (Molo) 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”, he told the operators.
He further revealed that the Committee will be engaging with the Competition Authority of Kenya and the Insurance Regulatory Authority to get insights on tightening regulations that govern the lenders.