By Benadeta Mwaura - Reporter
Kenya, August 21, 2026 - A fresh parliamentary inquiry into Mogo Auto’s lending practices is putting Kenya’s rapidly expanding asset-financing industry under renewed scrutiny, with questions being raised about the cost of borrowing, repossession of financed assets and the rights of customers who rely on motorcycles and vehicles to earn a living.
The National Assembly has committed a petition by the Kenya Bodaboda Riders and Owners Association to its Public Petitions Committee after the association asked Parliament to investigate what it describes as unfair lending and asset-financing practices by Mogo Auto Limited.
The petition alleges that some borrowers have faced high interest rates and additional charges, inadequate disclosure of loan terms and difficulties obtaining ownership documents even after making substantial repayments. It also raises questions about the repossession of motorcycles following default, the use of tracking devices, insurance claims and the handling of customers’ personal information.
The allegations have not been established by Parliament, and Mogo will have an opportunity to respond as the inquiry progresses. But the latest petition is significant because it comes against a backdrop of previous regulatory and legal scrutiny involving the lender.
In October 2024, the Competition Authority of Kenya found Mogo Auto in violation of the Competition Act after investigating complaints from four customers. The authority concluded that the company had engaged in false and misleading representations and unconscionable conduct in the issuance and administration of loan products.
CAK imposed a KSh10.85 million penalty and ordered Mogo to refund KSh344,939 to three customers representing excess amounts charged and differences arising from the exchange rates applied during loan issuance. The authority also directed the company to refrain from misleading representations and unconscionable conduct and to resolve pending and future customer complaints.
Among the complaints investigated by CAK were allegations involving loans disbursed in Kenya shillings but whose repayment calculations were linked to the US dollar. One complainant said a KSh2.1 million facility had been agreed at a flat interest rate but was subsequently calculated differently, while another alleged that after taking a KSh300,000 facility and making repayments for 20 months, the outstanding balance remained substantially higher than expected.
The regulator's intervention provides an important distinction in the current debate. While the latest allegations from boda boda operators remain allegations requiring parliamentary investigation, there is already a documented regulatory record showing that some customers previously raised concerns serious enough to result in enforcement action.
For thousands of boda boda operators, asset financing is not simply a consumer credit decision. The motorcycle is often the tool through which the borrower generates the income required to repay the loan in the first place.
That creates a particularly vulnerable financial relationship.
A borrower takes possession of a motorcycle, uses it to generate daily income and then makes regular repayments from that income. If the motorcycle is repossessed after default, the borrower can lose not only an asset but also the means of generating the money required to settle the outstanding debt.
This creates a difficult question for Kenya's rapidly expanding credit market: where should the line be drawn between legitimate recovery of a lender's money and lending practices that leave borrowers trapped in debt?
The answer becomes even more complicated when interest, insurance, processing fees, tracking costs, penalties and other charges are added to the original cost of the financed asset.
A motorcycle that appears affordable when presented through a daily or weekly repayment figure can ultimately cost a borrower considerably more than its cash price.
This is why transparency matters as much as the headline interest rate.
Borrowers need to understand the total amount they will repay, how interest is calculated, what happens when they miss payments, how insurance operates, what happens to the balance after an asset is repossessed and when ownership documents will be transferred.
Without that information, a borrower may make a decision based on the affordability of the immediate instalment without fully understanding the long-term cost of the loan.
The latest petition also raises questions about repossession and what happens to borrowers after their financed motorcycles are recovered.
The association alleges that some borrowers have had motorcycles repossessed immediately after default and that some customers continued to face repayment demands even after insurance compensation had been paid for stolen assets. It also claims that some borrowers have been listed with credit reference bureaus after disputes over outstanding balances.
These claims will now require evidence and scrutiny by the relevant authorities.
But the broader policy question is already clear.
Kenya needs an asset-financing market that allows people who cannot afford to buy vehicles and motorcycles outright to access productive assets without exposing them to opaque or potentially unsustainable credit arrangements.
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The industry itself plays an important economic role.
For a boda boda operator, access to financing can mean access to employment. For a small business owner, vehicle financing can provide the transport capacity needed to expand operations. For a young entrepreneur, an asset-financing facility may provide an opportunity that conventional bank lending would not.
Restricting such financing would therefore not necessarily solve the problem.
The challenge is making the financing fair, transparent and sustainable.
There is evidence that Parliament has been grappling with this question before. In 2024, the National Assembly's Departmental Committee on Finance and National Planning summoned several companies involved in motorcycle financing after allegations of exploitative lending practices were raised by boda boda operators. The committee said it wanted to understand the companies' business models and consider whether stronger regulation was required.
That history makes the latest petition particularly interesting.
If Parliament has examined concerns about asset financing before, and regulators have already taken enforcement action against individual lenders, then the question becomes whether Kenya's existing framework is strong enough to protect borrowers or whether enforcement remains largely reactive.
The answer could determine the future of an industry that has become an important source of credit for people who may struggle to access conventional bank financing.
There is also a responsibility on borrowers themselves.
Affordable credit should not be confused with cheap credit. A low-looking daily instalment can conceal a much larger total repayment obligation. Before accepting an asset-financing agreement, borrowers need to know the principal amount, total repayment, interest methodology, fees, insurance costs, penalties and the consequences of default.
For regulators, however, disclosure cannot simply mean putting complicated terms inside lengthy contracts and expecting customers to understand them.
The real test is whether an ordinary borrower can understand what the loan will actually cost and what will happen if circumstances change.
That is the question Parliament's inquiry now has an opportunity to address.
Mogo Auto is at the centre of the latest petition, but the implications extend well beyond one company. Kenya's asset-financing industry sits at the intersection of financial inclusion, entrepreneurship and consumer protection.
The country needs lenders willing to provide capital to people who need productive assets. But it also needs rules that ensure access to credit does not become access to a cycle of debt from which borrowers struggle to escape.
The parliamentary investigation should therefore look beyond whether individual complaints can be resolved.
It should ask a bigger question: when a motorcycle is financed to help someone earn a living, does the financing arrangement create a path to ownership and economic independence — or can the cost of that financing ultimately undermine the very livelihood it was supposed to support?
That is where the real debate over Mogo, and Kenya's wider asset-financing industry, should begin.