Kigumo Member of Parliament Joseph Munyoro has raised an alarm over alleged exploitative lending practices within the bodaboda sector.
Speaking in Parliament on Tuesday, Joseph Munyoro requested a statement on the issue from the House National Planning Committee.
“I request a statement from the chairperson of the Departmental Committee on Finance and National Planning on the plight of the bodaboda operators across the country,” Munyoro said.
“The buy-now-pay-later model has become a nightmare to hundreds of jobless youths which lures the borrowers with deceitful promises of lower down payment, easy instalments yet hidden fees and exorbitant interest rates and aggressive debt collection tactics soon reveal the actual prices.”
Munyoro went on to allege that the model has gained popularity among young and low-income consumers who have no access to traditional credit facilities.
"The bodaboda has emerged as the key sector driving the uptake of the buy-now-pay-later models of purchase of various merchandise such as the motorcycles," Munyoro said.
According to bodaboda operators, the business is highly competitive leading to low income which is a hindrance to the payment of weekly instalments.
He went on to say that they are counting losses caused by the indiscriminate impounding of motorcycles including those of diligent owners with less than 10 per cent outstanding loans.
Munyoro questioned the government's solution in regulating the buy now pay later model and rogue lending institutions infringing on consumer rights.
He urged the government to create alternative financial models that are fair and transparent empowering bodaboda operators.
