MPs to probe Mogo Auto over alleged unfair lending practices

Members of Parliament (MPs) have initiated a inquiry into the operations of credit provider Mogo Auto Ltd following complaints over alleged unfair lending practices. The investigation focuses on asset financing terms offered to motorists, including operators within the transport and construction logistics sectors across Kenya.

The National Assembly committee tasked with financial oversight directed the review after receiving petitions from borrowers. The complaints center on interest rate structures, hidden operational fees, and swift asset repossession procedures executed by the lender when clients default on scheduled payments.

Borrowers, including operators of commercial pick-ups, light trucks, and passenger transport vehicles, allege that contractual terms were not clearly disclosed during loan origination. Several transport operators reported losing their primary income-generating assets despite having paid off substantial portions of their initial principal balances.

Lawmakers stated that the probe will assess whether Mogo Auto complies with regulations set by the Central Bank of Kenya (CBK). The parliamentary panel intends to examine loan agreements, interest calculation models, and collection protocols used by the firm.

The committee has summoned the management of the microfinance institution alongside representatives from the CBK to present documentation and explain their consumer protection frameworks.

Public transport associations have welcomed the parliamentary inquiry, citing long-standing concerns over unregulated digital and private asset financing schemes operating within the local market.

The investigation comes amid broader parliamentary discussions regarding non-bank financial institutions and asset finance lenders in Kenya.

Lawmakers emphasized the necessity of enforcing fair lending standards to protect small business owners and individual transport operators from predatory financial arrangements.

Further hearings are scheduled at Parliament Buildings in Nairobi, where affected borrowers and regulatory officers will submit formal testimonies. The committee expects to table a detailed report containing regulatory recommendations before the full house upon conclusion of the proceedings.