The National Assembly Committee on Finance and National Planning has begun the process of enacting a law to free boda boda operators from the jaws of alleged predatory digital lenders.
This is after three key Bills seeking to amend existing laws governing digital lending were subjected to public participation to incorporate the views of stakeholders from across the country.
The proposals seeking to free the operators are contained in three crucial Bills; the Tax Laws (Amendment) Bill 2024, the Tax Procedures (Amendment) Bill 2024, and Business Laws (Amendment) Bill, 2024.
The bills were arrived at after boda boda operators petitioned the National Assembly to institute regulations into the Buy-Now-Pay-Later (BNPL) credit sector.
The Clerk of the National Assembly received a petition from the Digital Boda Drivers and Deliveries Association of Kenya seeking the enactment of legislation to regulate the sector and to protect them from exploitative tendencies.
Association members led by their chairman, Calvince Okumu, said their petition is intended to address key challenges faced by their members.
“Currently, there is no substantive law governing digital riders. The TNC regulations in Kenya exclude motorcyclists from essential protections, and the Boda-Boda Regulations of 2015 do not address the digital component of the sector”, Okumu said.
Among the prayers sought from the National Assembly through the petition is the enactment of legislation that recognises digital riders as a unique sector of the transport industry with specific legal protections.
The petition was committed to the Finance and National Planning Committee, which commenced a probe into the allegations of exploitative lending tendencies.
The Business Laws (Amendment) Bill, 2024 will help reign in unscrupulous lenders to regulate the sector and protect operators who purchase their motorbikes through the BNPL arrangement.
The Business Laws (Amendment) Bill, 2024 was committed to two departmental committees for consideration and public participation following its First Reading on November 13, 2024.
The proposed law provides for consumer protection for borrowers from predatory lenders including setting conditions for micro-lending, financial costs associated with micro-loans as well as the rights and duties associated with micro-loans.
To prohibit illegal non-deposit-taking credit businesses that often expose consumers, the Bill proposes an amendment to the Central Bank Act to require licensing of the providers.
This means all non-deposit-taking credit providers previously unregulated will be monitored by the Central Bank which will then enforce a code of conduct.
To enhance the spirit of transparency as required by the law, a non-deposit-taking Microfinance business shall furnish the consumer with accurate information on terms and conditions for lending, the financial costs to be met by the borrower and maintain confidentiality of information relating to borrowers.
In a bid to further bring sanity to the digital lending sector amid heightened efforts by the Office of the Data Commissioner and the Central Bank, the Business Laws (Amendment) Bill, 2024, proposes to make it stiffer for digital lenders to operate.
It says: “In the course of debt collection or loan recovery, a non-deposit-taking microfinance business shall not harass, abuse or oppress a borrower or guarantor, threaten or use violence, or use obscene or profane language.”
If the Bill sails through, any lender who fails to heed the provisions will face penalties.
The three Bills mentioned are among other three; Public Finance Management (Amendment) (No. 3) Act, 2024; Public Finance Management (Amendment) (No. 4) Act, 2024; Public Procurement and Disposal Act (Amendment) Bill, 2024, under consideration by the Finance Committee.
