Parliamentary Inquiry Launched

The National Assembly has committed a petition by the Kenya Bodaboda Riders and Owners Association to its Public Petitions Committee, launching a fresh parliamentary inquiry into Mogo Auto Limited's lending practices. The petition, submitted by association's National Executive Chairperson Charles Gichira, asks Parliament to investigate alleged unfair lending and asset-financing practices by the lender.

Speaker Moses Wetang'ula committed the petition to the committee pursuant to Standing Order 208A, citing Article 119 of the Constitution, which grants citizens the right to petition Parliament. The committee is required to report its findings under Standing Order 227(2). Gichira said the association had previously tried to have its grievances addressed through engagement with the National Assembly's Departmental Committee on Finance and National Planning, and the petition alleges that Mogo Auto failed to attend those committee sittings.

Allegations in the Petition

The petition raises concerns over high interest rates and additional charges, inadequate disclosure of loan terms and repayment obligations, and difficulties obtaining ownership documents for motorcycles despite substantial repayments. It also alleges that some borrowers have not received logbooks even after making substantial payments, and some have made repayments exceeding the value of their motorcycles without acquiring ownership.

The association further alleges that recovery measures against defaulters are unfair, intimidating, and oppressive, with motorcycles repossessed immediately after default. It claims that some motorcycles equipped with tracking devices were stolen and not recovered, and that borrowers have continued to face repayment demands after insurance companies covered the loss, with some being listed with credit reference bureaus after disputes. The petition also asks Parliament to examine how Mogo Auto collects, processes, stores, and shares customers' personal information, in relation to the Data Protection Act, 2019.

Mogo Auto has not yet responded to the allegations, which have not been established by Parliament. The inquiry provides the company an opportunity to present its side.

Prior Regulatory Action

The petition comes against a backdrop of previous regulatory scrutiny. In October 2024, the Competition Authority of Kenya (CAK) found Mogo Auto in violation of the Competition Act after investigating complaints from four customers. The authority concluded the company engaged in false and misleading representations and unconscionable conduct in the issuance and administration of loan products. The CAK imposed a KSh10.85 million penalty and ordered Mogo to refund KSh344,939 to three customers, representing excess amounts and exchange rate differences. It also directed the company to refrain from such practices and to resolve customer complaints.

One complainant in the CAK case said a KSh2.1 million facility agreed at a flat interest rate was later calculated differently. Another alleged that after taking a KSh300,000 facility and making repayments for 20 months, the outstanding balance remained substantially higher than expected. These allegations, while not yet formally investigated by Parliament, highlight concerns that the latest petition seeks to address.

Broader Implications

The inquiry spotlights the asset-financing industry in Kenya, where many borrowers use financed motorcycles as income-generating tools. The petition describes a power imbalance: the borrower depends on the asset to earn a living while repaying the loan, making them particularly vulnerable to the practices alleged. The association wants Parliament to examine Mogo Auto's compliance with the regulatory framework governing lending and asset financing, including the Central Bank of Kenya framework, and to recommend legislative, regulatory, or administrative measures to protect borrowers from exploitation, intimidation, and unfair business practices.