How Boda Boda Operators are Exploited by Buy-Now-Pay-Later Credit Lenders

How Boda Boda Operators are Exploited by Buy-Now-Pay-Later Credit Lenders

The National Assembly's Departmental Committee on Finance and National Planning has uncovered widespread exploitation of boda boda operators by unscrupulous lending companies operating in the Buy-Now-Pay-Later (BNPL) credit market.

The issue came to the fore after Kigumo Member of Parliament, Hon. Joseph Munyoro, sought a statement from the Committee regarding the government's efforts to regulate BNPL providers and address violations of consumer rights.

During the Committee's engagement with representatives from the Kenya Boda Boda Association, led by National Executive Chairman Mr. Charles Gichira, a troubling picture emerged. Boda boda operators, estimated to number over 2 million across the country, have been lured into loans with deceptive terms, only to face aggressive debt collection tactics and the indiscriminate impounding of their motorcycles, even when they had paid off the majority of their loans.

"The boda boda operators have gone through untold suffering," Mr. Gichira told the Committee. "We have been lured by borrowers with deceitful deals of low-down payments and easy installments, only to discover hidden fees and exorbitant interest rates."

Further concerns were raised about the potential collusion between lenders and motorcycle thieves, with many operators reporting the disappearance of their bikes just as they were nearing the end of their loan repayment period. The Association's Chairlady, Ms. Faith Asiba, said that the lack of response from lenders when trackers were activated has fueled suspicions of foul play.

In response, the Committee pledged to get to the bottom of the matter and has called on all affected operators to come forward and submit their complaints. The Committee also plans to engage with the Competition Authority of Kenya and the Insurance Regulatory Authority to develop a robust regulatory framework that can protect boda boda operators from such exploitative practices.

"We have all failed the boda boda sector," acknowledged Hon. Munyoro. "The lenders are operating in a vacuum, and that's why they have taken advantage of many unemployed young people. We need to ensure justice is served and that these criminal acts are brought to an end."

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