By Shadrack Nyakoe
MOGO Kenya, a leading provider of vehicle financing and microloans, has entered into a settlement agreement with the Competition Authority of Kenya (CAK) following complaints related to its dollar-denominated loans.
The company, which offers financing options for used cars, logbook loans, and loans for Boda Boda and Tuk Tuk vehicles, has played a significant role in promoting financial inclusion and supporting the growth of Micro, Small, and Medium Enterprises (MSMEs) across the country.
The dollar-denominated loan product, which was chosen by less than 15% of MOGO’s customers, had been offered as an alternative to loans denominated in Kenyan Shillings, with the promise of lower interest rates.
However, due to fluctuations in exchange rates, some customers saw their repayment amounts increase, prompting complaints to the CAK.
In response, MOGO entered into a voluntary settlement agreement with the regulator and the affected customers.
The company emphasized that this was a goodwill gesture rather than an admission of wrongdoing, as dollar-denominated loans are fully compliant with Kenya’s legal and regulatory framework.
MOGO also announced that, as of May 2024, it will no longer issue new dollar-denominated loans in Kenya, signaling a shift in its product offerings while reaffirming its commitment to prioritizing customer welfare.
