National Assembly's Finance committee chairperson Kuria Kimani /FILE
The National Assembly Finance and National Planning Committee has moved to scrutinise Buy Now Pay Later (BNPL) firms over complaints of customer exploitation, warning that companies invited to explain their operations must appear before lawmakers.
Committee chairman Kuria Kimani said MPs would review the sector’s regulatory framework and consumer protection safeguards following complaints from customers about their experiences with asset financing arrangements.
Kimani warned that the committee would invoke the provisions of Standing Order 191 against firms that fail to honour invitations without sufficient justification.
“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,” he said.
The committee expressed concern after Mogo Auto Limited, one of the firms invited to appear before lawmakers, failed to attend a scheduled meeting and instead requested that the engagement be rescheduled.
Kimani said the company had been invited to respond to concerns raised by various stakeholders about its operations.
He maintained that the committee would insist on accountability from firms operating in the sector as MPs examine whether existing regulations adequately protect customers.
The review will focus on motorcycle asset financing and BNPL arrangements, including the licensing status of firms, their customer onboarding procedures and compliance with requirements set by the Central Bank of Kenya (CBK) and other relevant regulators.
Lawmakers will also examine how firms manage customer accounts, reconcile payments, issue statements and communicate with borrowers over arrears or changes to their accounts.
The committee plans to scrutinise procedures governing loan defaults, notices to customers, asset repossession, valuation and disposal of recovered assets, as well as how proceeds from the sale of repossessed property are applied to outstanding debts.
MPs will further assess complaints-handling mechanisms, customer redress procedures and the oversight of agents and third-party service providers.
The committee is also scheduled to engage the CBK as it seeks to establish the extent of regulatory oversight, identify gaps in the existing framework and propose measures to strengthen consumer protection.
The inquiry comes amid growing scrutiny of asset financing arrangements, particularly those used by motorcycle operators and other customers seeking credit to acquire income-generating assets.
The committee said the engagements would help lawmakers establish whether firms were complying with existing safeguards and identify regulatory changes needed to protect consumers.
