Kenyan lawmakers are pushing for stronger regulations on Buy Now, Pay Later (BNPL) services amid concerns over consumer exploitation. The National Assembly’s Finance and National Planning Committee is set to engage with the Central Bank of Kenya (CBK) and financing companies to review consumer protection measures in this rapidly growing sector.
The committee, led by Molo MP Kuria Kimani, is particularly focused on motorcycle asset financing and other credit products that allow installment payments. Lawmakers are demanding detailed information from financing companies on their lending practices, customer registration, licensing, and compliance with financial regulations.
This parliamentary review follows complaints from borrowers who claim that some financing arrangements lead to high repayment costs and unfair treatment when they struggle to meet obligations. Kimani has warned that companies failing to cooperate with the inquiry could face action under the National Assembly’s Standing Orders.
Kenya’s BNPL market has seen significant growth, fueled by mobile money usage, smartphone adoption, and demand for alternative financing. The model allows consumers to purchase products immediately while spreading payments, appealing to individuals and small businesses unable to afford upfront costs.
Companies like Lipa Later and M-KOPA operate in Kenya’s broader installment financing market, offering solutions to consumers. However, concerns have arisen over the transparency of agreements, additional charges, and debt recovery methods. These are sector-wide issues and do not imply wrongdoing by specific companies.
Kenya has been strengthening its regulatory framework to address these challenges. The Business Laws (Amendment) Act, 2024 expanded the CBK’s authority over non-deposit-taking credit providers, including certain BNPL and asset financing businesses. The central bank has also developed regulations to enhance supervision and consumer safeguards.
Lawmakers will examine whether lenders adequately explain repayment obligations, assess customers’ ability to repay, and follow acceptable procedures when recovering financed assets. The investigation could lead to tighter regulatory oversight and stronger enforcement of consumer protection measures.
While BNPL services offer a vital financing alternative for many Kenyans, policymakers must balance protecting borrowers with ensuring access to credit. The review’s outcome could shape how digital lenders and asset financing companies operate in Kenya’s evolving fintech market.
