Kenyan lawmakers are stepping up scrutiny of Buy Now, Pay Later (BNPL) companies following complaints from customers who say they have been exploited by firms offering credit and asset financing.

The National Assembly’s Finance and National Planning Committee plans to question companies operating in the sector as it reviews whether existing regulations adequately protect consumers.

Committee chair Kuria Kimani said lawmakers had received complaints from people who had experienced problems with the firms. He said the companies would be required to explain how they comply with consumer protection rules.

“The Committee is in receipt of several complaints from victims of exploitation,” Kimani said, adding that firms must demonstrate that their operations meet the required safeguards.

The committee has warned that it could take action against companies that ignore its summons.

Mogo Auto fails to attend meeting

Mogo Auto Limited, one of the firms invited to appear before the committee, did not attend the scheduled meeting. According to Kimani, the company requested that the session be postponed.

The chairperson said the committee expected all invited firms to honour its requests as lawmakers investigate concerns raised by customers and other stakeholders.

He warned that the committee could invoke Standing Order 191 to compel attendance where necessary.

The committee has not yet announced the outcome of its planned engagements with the companies.

Lawmakers examine lending and repossession practices

The inquiry will examine how BNPL companies structure their financing arrangements, assess customers and manage repayments.

Lawmakers also want details of the firms’ licensing and regulatory status, including their dealings with the Central Bank of Kenya (CBK) and other relevant authorities.

Another area of focus is how companies communicate with customers who fall behind on payments, including notices of arrears and changes to account terms.

The committee will also examine what happens when borrowers default. This includes the procedures used to repossess financed assets, how recovered property is valued and sold, and how the proceeds are applied to outstanding debts.

These questions are particularly relevant to motorcycle financing, where customers may rely on financed assets to earn a living.

The lawmakers also intend to review customer complaint procedures, dispute resolution channels and the conduct of agents or third-party service providers working on behalf of the firms.

CBK to face questions on oversight

The committee is also scheduled to meet with the Central Bank of Kenya as part of the review.

The engagement is expected to help lawmakers assess whether current regulatory arrangements provide sufficient oversight of the sector and identify gaps that may leave customers vulnerable.

The inquiry could inform recommendations on clearer rules, improved accountability and stronger consumer safeguards.

However, the complaints under review do not, on their own, establish that every BNPL provider has engaged in wrongdoing. The committee's findings and responses from the firms will be important in determining whether specific practices have breached existing requirements.

The review comes as lawmakers seek to establish whether Kenya’s current framework adequately addresses the risks associated with credit-based purchases and asset financing.