Kigumo MP Joseph Munyoro wants the government to come up with ways of protecting boda boda operators from financial exploitation by private firms that sell their merchandise.
The MP has said the sector has emerged as one of the key sectors driving the uptake of the Buy Now Pay Later payment model for the purchase of motorcycles.
The Model, the MP said, has gained popularity, especially among low-income earners who may not have access to traditional credit facilities.
Munyoro however noted that what is marketed as an accessible path to owning a motorcycle has become a trap for many unassuming youths fighting for financial independence.
The firms, he said, lure the youths with ‘deceitful’ promises of low down payments and easy instalments and that consumers are only hit by the burden of hidden fees, exorbitant interest rates and aggressive debt collection tactics later.
The MP said boda boda operators have revealed that the high competition in the sector reduces their income and that in most instances, their daily proceeds are unable to service weekly instalments to their creditors.
As a result, many youths end up losing their motorcycles after they are impounded after defaulting on their payments, rendering them jobless.
“Many boda boda operators are counting losses including those with less than 10 per cent outstanding loans following the indiscriminate impounding of their motorcycles."
In a statement read in the national assembly, the MP on Wednesday asked the chairperson of the Committee on Finance and National Planning to explain how the government plans to protect boda boda operators.
He also sought clarification on the measures that the government has put in place to regulate the activities of Buy Now Pay Later firms in the country, including rogue lending institutions that violate consumers’ rights.
Munyoro further asked for an explanation of how the government plans to develop alternative financing models that are fair, transparent and genuinely empower boda boda operators.
According to Business Wire, an American company that disseminates full-text press releases from thousands of companies and organizations worldwide to news media and other audiences, Buy Now Pay Later payments in Kenya grew by about 23.2 per cent last year to reach USD1,056.6 million in 2023.
The growth, the company said, was supported by heightened e-commerce penetration and is expected to grow by 12.2 per cent annually between 2023 and 2028, with the industry’s gross merchandise value increasing from USD857.7 million in 2022 to USD1,881.7 million by 2028.