Kenya's Working Poor Are Paying 180% APR for What the Industry Calls Financial Inclusion.

The Kenyan "BNPL" landscape: $1 billion a year, but not what the word means.

The single most misleading word in Kenyan financial policy is "BNPL." In Stockholm, Sydney or San Francisco it denotes interest-free pay-in-four, repaid within twelve weeks, with the merchant — not the consumer — bearing the financing cost. In Nairobi, Kisumu and Mombasa it has come to denote something quite different: 12-to-24-month asset financing of a motorcycle, smartphone or fridge, with the asset itself serving as collateral, repayments deducted daily by M-Pesa paybill, and remote disablement of the asset on default.

The numbers, even taken at face value, are large. ResearchAndMarkets' Q1 2025 update reports that Kenya's BNPL payments grew 16.8% to US$1.03 billion in 2024 and projects expansion at a 9.6% CAGR to US$1.86 billion by 2030, on a 2021–2024 CAGR of 23.4%. BNPL has transitioned from being a niche offering to a mainstream payment option in Kenya.

The 2024 FinAccess Household Survey conducted by the Central Bank of Kenya , the Kenya National Bureau of Statistics and FSD AfricaKenya found that 64.0% of Kenyans now use credit, that mobile-money daily usage has more than doubled to 52.6% from 23.6% in 2021, and — most worryingly — that the share of borrowers who completely default has risen from 10.7% in 2021 to 16.6% in 2024. The FSD Kenya/CIS Kenya/Creditinfo CRB study published in August 2024 documents that on average 10 million unique borrowers take at least one digital loan annually and that approximately 270 million new digital loans valued at Sh1.51 trillion were issued in the five years to 2023.

This matters beyond the borrower. A market that finances phones, motorcycles and household goods at scale also shapes household cash flow, informal-sector productivity, credit bureau records and public trust in digital finance. If repayment stress rises, the effects do not remain inside BNPL contracts. They show up in reduced consumption, over-borrowing, loan stacking, business interruption and a weaker credit culture. For banks, regulators and responsible fintechs, the risk is that poorly governed asset finance contaminates confidence in the wider digital-credit ecosystem.

Within that broad credit footprint, the BNPL/asset-finance segment is dominated by:

• Watu Credit (motorcycles, three-wheelers, increasingly smartphones)
• M-KOPA (solar systems, smartphones, electric motorcycles, cash loans, hospital cover)
• Mogo (Eleving Group; cars, motorcycles, smartphones)
• Aspira (CIM Finance Mauritius; electronics, furniture, education, travel)
• Lipa Later (electronics, e-commerce — now in administration)
• Safaricom Faraja with EDOMx (Lipa Na M-PESA merchants; 30-day interest-free) - Did this partnership ever take off?? - FINTAK Wonders.
• Craft Silicon SpotIt (bank-app integrated, "Get Now Pay Later")
• Power Financial Wellness (employer payroll deductions; earned-wage access)

Faraja, with its zero-interest 30-day repayment and KSh 100,000 ceiling, is the only product in the Kenyan market that resembles classical Western BNPL. Almost everything else is hire-purchase rebranded — a category that, when last regulated under the colonial-era Hire Purchase Act, required formal disclosure of price, terms and warranty.

Key operators.

Watu Credit. Founded in Mombasa in 2015 by Latvian lawyer Andris Kaneps, Watu finances roughly 70% of motorcycles sold on hire purchase in Kenya, in CEO Kaneps's own evidence to a Senate committee in November 2023. He told senators the company had financed more than 500,000 motorbikes. Country manager Eric Massawe told MPs in May 2024 that From their current portfolio of 400,000 financed motorbikes, less than 100 motorbikes had been reported as lost. Watu is owned through Mauritius-incorporated Watu Holdings Limited; the NSE-listed Car & General holds a 29% associate stake (confirmed in C&G's annual report and a 2024 Kenya Tax Appeals Tribunal ruling). Other shareholders disclosed across funding rounds include FMO Investment Management , Gateway Partners , Verdant Capital , AHL Venture Partners and Metier.

Watu’s numbers capture both the scale and volatility of Kenya’s asset-finance boom. Watu Holdings reported gross revenue of KSh 29.9 billion, about US$231 million, in 2024, but net profit collapsed 85% to US$1.2 million as rising impairments, foreign-exchange losses and weaker repayment behaviour weighed on operations in Kenya, Uganda and Sierra Leone. The recovery in 2025 was striking. According to Car & General disclosures reported by TechCabal, Watu posted net profit of KSh 4.8 billion, about US$37 million, for the year ended December 31, 2025, up from KSh 157 million a year earlier, while revenue rose 92.7% to KSh 28.3 billion, about US$219.2 million. The rebound was driven largely by Simu, its fast-growing smartphone-financing unit, which has tilted the group’s product mix beyond motorcycles and tuk-tuks. Watu told Capital FM in July 2025 that it had financed three million smartphones across eight African markets, and later told TechCabal it was targeting US$340 million in revenue in 2026 as it expands beyond Africa into Latin America.

M-KOPA Headquartered in London with operating subsidiaries in Kenya, Uganda, Nigeria, Ghana and South Africa, M-KOPA was launched commercially in 2012 by Jesse Moore, Nick Hughes (the originator of M-Pesa at Vodafone) and Chad Larson. In May 2023 it closed a landmark US$250 million-plus financing — US$55 million in equity led by Japan's Sumitomo Corporation (US$36.5 million), with Blue Haven Initiative , Lightrock , Broadscale Groupand Latitude; and over US$200 million in sustainability-linked debt led by Standard Bank Group, with IFC, Lion's Head, FMO, British International Investment, Mirova SunFunder and Nithio. The company crossed US$1.6 billion (KSh 207 billion) in cumulative credit extended in Kenya by November 2025 and reports 4.8 million Kenyan customers, including 4.5 million smartphone buyers since 2010. Its Kenya subsidiary, M-KOPA Loans Kenya Limited, is regulated by the Central Bank of Kenya as a digital credit provider, and its terms of service expressly confirm administrative rights to "restrict usage of and potentially block or disable" the financed device.

MOGO Kenya / Eleving Group .Mogo, the Kenyan vehicle-financing brand of Latvia-headquartered Eleving Group (governance from Luxembourg, 17 markets across Europe, Africa and Central Asia), entered Kenya in 2020. By 2025 it operated in 36 counties through more than 80 branches, with more than 42,500 motorcycle customers and an average tenor of 18 months. Mogo Auto Limited is now defending a class-action petition in the High Court alleging "excessive interest rates", repayments linked to foreign-exchange movements without proper disclosure, hidden fees in compulsory insurance, and aggressive repossession tactics. In 2024 Mogo was reportedly fined KSh 11.5 million (about US$86,300) by Kenyan regulators for "false, misleading and unconscionable" practices relating to disclosure and recovery.

Aspira Kenya.Operated by CIM Finance, a Mauritius Stock Exchange-listed group with US$400 million in assets, Aspira finances electronics, furniture, gym equipment, education ("Aspira Soma") and SMEs ("Aspira Bizna") up to KSh 3 million. CIM Finance Kenya MD Yoeal Haile told Money & Markets in 2018 that Aspira charges roughly 4% per month — an APR around 48% — significantly cheaper than its motorcycle and smartphone peers but still well above bank rates.

Lipa LaterFounded in 2018, Lipa Later raised US$12 million in seed funding in January 2022 from Cauris, Lateral Frontiers and Orbit Startups, ranked 25th on the FT's 2024 list of Africa's fastest-growing companies, acquired in December 2023 for KSh 250 million, and entered administration on 24 March 2025 with Joy Vipinchandra Bhatt of Moore JVB Consulting appointed administrator. Employees had not been paid for months by December 2024 and the High Court ruled against Lipa Later in a December 2024 dispute with London consultancy Africa Foresight Group over an unpaid US$13,516 fee.

Safaricom Faraja and EDOMx.Launched on 27 July 2023, Faraja gives Lipa Na M-PESA customers up to 30 days interest-free credit for purchases between KSh 20 and KSh 100,000 at participating merchants (Naivas, Goodlife, Citi Walk and others). EDOMx, a Kenyan fintech, was authorised as a digital credit provider by the CBK in March 2023; Equity Bank provides the underlying credit. This is the closest Kenya has to genuine Western BNPL — and the only Kenyan product that is structurally consistent with the FCA, ASIC and EU Consumer Credit Directive frameworks.

Craft Silicon SpotItis a mini-app integrated into partner banking apps that uses bank credit scores to extend interest-bearing instalment credit at merchants.

Power Financial Wellness, founded in 2019 by Brian Dempsey and backed by the Visa Africa Accelerator and Catalyst Fund, offers earned-wage access, payroll-deducted savings, salary advances, loans and insurance.

The punitive mechanics.

Three primary enforcement mechanisms distinguish Kenyan BNPL from anything in the Organisation for Economic Co-operation and Development (OECD.)

First, remote device disablement. M-KOPA's contract terms permit the company to "restrict usage of and potentially block or disable" any financed smartphone or motorbike, and the Samsung Knox security feature plus M-KOPA's own SIM-lock are the technical substrates. Carlcare, the official servicing partner, confirms that "Failure to pay will result in the phone getting locked and you losing access to it." Kenya Insights documented multiple named customers — Benard Luta in Nairobi (Samsung A03 financed at Sh34,000 against a cash price of Sh15,000), Purity Aseo in Kawangware (still paying for a phone stolen 15 months earlier), Oscar Nkulei in Kitui (Tecno Pop 9, Sh27,000 financed against Sh12,000 cash) — whose phones were locked during business hours and matatu rides. M-KOPA Nigeria's own corporate communications, reported by Condia in 2025, describe the model frankly: "By suspending access rather than seizing property, M-KOPA builds enforcement into the asset itself."

Second, GPS-based motorcycle tracking and repossession. Every Watu and Mogo motorcycle ships with a tracker. Per Watu's own published terms, on default a Relationship Officer attempts contact "by phone, SMS and/or physical visit" before "Watu Credit may repossess the Vehicle"; the customer has a 7-day grace period to settle arrears and pay a release fee. In practice, the system is contested: senators Cherargei, Mandago and others have alleged that motorcycles are stolen just before or just after final repayment and that tracker information leaks from inside the lending companies. Watu CEO Kaneps has rejected this, telling the Senate Trade and Industrialisation Committee in November 2023 that "Motorcycle theft is a rampant problem countrywide but a few cases are taken out of context."

Third, physical recovery and the linked criminal economy. Boda boda associations from Migori to Makindu have repeatedly accused recovery agents working with the lenders of violence and complicity in killings. The Daily Nation's investigation "Vicious cartels killing boda boda riders" documented, citing the Boda Boda Safety Association of Kenya Kajiado branch, "at least 10 people killed by the end of 2022, another 50 injured and over 600 motorcycles stolen" in Kajiado County alone. On 4 September 2024, riders blocked the Nairobi–Mombasa highway at Makindu to protest the murder of one of their own, who had been allegedly killed and his Watu-financed motorcycle stolen.

Parliamentary action has built steadily over time. In November 2023 the Senate Trade and Industrialisation Committee, led by Nandi Senator Samson Cherargei, called for a special investigation into Watu. By mid-2024 the National Assembly's Finance and National Planning Committee, chaired by Molo MP Kuria Kimani and acting on a public petition by Kigumo MP Joseph Munyoro, had summoned Watu Credit, Mogo Motorcycles Kenya, JoyInc Group and others over allegations including charges of up to Sh571,000 for a single bike. "It is harrowing to hear that someone paid Sh570,000 for one bike and has never received a logbook," Kimani told the hearing. "What kind of business is this?"

Pricing and effective interest rates.

The Central Bank of Kenya cut the Central Bank Rate by 50 basis points to 10.75% on 5 February 2025, after earlier reductions from 13.0% in late 2023 through 12.75%, 12.00% and 11.25%; a further cut to 10.0% followed on 8 April 2025 and to 9.75% in June 2025. The CBK has published that the average commercial bank lending rate was 17.22% in November 2024, 16.89% in December 2024, and 16.64% in January 2025 — high, but a small fraction of what BNPL/asset-finance customers pay. The Central Bank of Kenya (CBK) announced the average commercial bank lending rates for January 2025 to be 16.64%, down from 16.89% in December 2024.

A typical Watu motorcycle loan, as financed in 2023–2025, runs deposits of KSh 30,000–37,000 plus daily payments of KSh 300–400 for 52–80 weeks. A Senate witness in November 2023 told the chamber that if a motorbike retails at Sh150,000, they will pay more than Sh300,000 at the end of the hire purchase term. In May 2024 Watu's country manager confirmed an interest rate of 8.6% per month on the reducing balance — equivalent to a nominal APR of roughly 103% and a compounded APR of around 169%. Karachuonyo MP Adipo Okuome captured the math in the hearing saying "On the interest charged, you spoke of 8.6% month, calculate it per year it is enormous. Within one year the interest is more than the value of the asset."

For M-KOPA smartphones, the cash-price-to-financed-price markups documented in 2024–2025 cluster between 125% and 180%:

• Tecno Pop 9: Sh12,000 cash, Sh27,000 financed (125% markup, ~365 days)
• Samsung A03: Sh15,000 cash, Sh34,000 financed (~127% markup)
• Samsung A05: cash retail around Sh14,500, M-KOPA total approx KSh 40,000 (~175% markup, weekly KSh 699 × 52 weeks plus deposit)

M-KOPA's own Google Play Store disclosure for its separate cash-loan product states "Interest rate (monthly): 5.6–9.1%; Interest rate (annual/APR): 67–109%." Its standard terms specify "A monthly Interest rate of between 3–15% will apply." That is the company's own first-hand admission that even its lowest tier carries an APR exceeding the CBR by 60 percentage points.

By contrast, Faraja charges zero interest within 30 days, Aspira is around 4% per month, and Hustler Fund loans cost 8% per annum.

The regulatory gap, now closing.

Until December 2024, BNPL providers in Kenya were outside any prudential regime. The Central Bank of Kenya (Amendment) Act 2021 and the Digital Credit Provider Regulations 2022 captured "digital credit business" — but operators argued asset finance, hire purchase and BNPL fell outside the definition. The CBK directory shows that by December 2025 it had licensed 195 digital credit providers (227 by April 2026) out of more than 800 applications received since March 2022.

The Business Laws (Amendment) Act No. 20 of 2024, enacted on 11 December 2024 and effective 27 December 2024, broke that ambiguity. It deletes the old "digital credit business" definition in the CBK Act and replaces it with "non-deposit taking credit business" — explicitly defined to include "asset financing, pay-as-you-go, buy now, pay later arrangements (excluding hire purchase), credit guarantees and peer-to-peer lending." Section 33S now criminalises unlicensed non-deposit-taking credit business with up to three years' imprisonment or a KSh 5 million fine. The amendment also empowers CBK to determine pricing parameters, enforce a binding Code of Conduct, and revoke licences where customer complaints are not addressed or "unreasonable or unjustifiable charges" are imposed.

The CBK published draft Non-Deposit-Taking Credit Providers Regulations 2025 in August 2025. They propose a tiered framework: licensing for entities with capital above KSh 20 million, registration below; application fees of KSh 100,000; annual fees of KSh 250,000–500,000 (up from KSh 20,000 under the DCP regime); prior CBK approval for new products, branch openings, significant shareholding changes, and mergers; submission of complaint and NPL data; and a binding Code of Conduct. The Draft Regulations grant CBK explicit discretion to determine "which BNPL arrangements" fall in scope.

This brings Kenya into alignment with global peers:

• United Kingdom: HM Treasury's October 2024 consultation and 19 May 2025 final response confirmed BNPL ("regulated deferred payment credit agreements") will fall under FCA authorisation. The FCA's July 2025 research found that 10.9 million UK adults (20%) had used unregulated BNPL at least once in the 12 months to May 2024; Deputy CEO Sarah Pritchard said the regulator was putting in place proportionate protections for the 11 million people who use it. The UK government legislated on 14 July 2025 to regulate BNPL (Deferred Payment Credit) from 15 July 2026 for third-party lenders, requiring affordability assessments, FCA-bespoke disclosure rules (rather than the 1974 Consumer Credit Act) and consumer access to the Financial Ombudsman and section 75 protections.
• Australia: The Treasury Laws Amendment (Responsible Buy Now Pay Later and Other Measures) Act 2024 received Royal Assent on 10 December 2024. From 10 June 2025, BNPL providers must hold an Australian Credit Licence, join AFCA, comply with modified responsible-lending obligations, and abide by the National Credit Code.
• India: The Reserve Bank of India's September 2022 Digital Lending Guidelines and June 2023 Default Loss Guarantee circular impose direct disbursement to borrowers, mandatory Key Facts Statements with APR, capped FLDG at 5%, and prohibition of synthetic securitisation. The 2025 Directions tighten APR disclosure, multi-lender arrangements, data localisation (24-hour repatriation) and DLG governance.
• European Union: The revised Consumer Credit Directive (CCD2), entering into force November 2023, brings BNPL into scope, mandates affordability assessments, and creates a pre-contractual disclosure regime.

Credit scoring and targeting.

Kenya's BNPL operators do not use formal credit-bureau scoring in the way a bank does. Instead they triangulate three data streams: ID and KRA PIN verification at the point of sale; M-Pesa transaction history and phone metadata; and, crucially, the asset itself as both income-generator and collateral. This is the "default-is-priced-in" model: at scale, with sufficient interest-rate cushion and reliable repossession, the lender does not need to know in advance whether any given borrower can afford the loan, because the asset can always be reclaimed.

The model is rational from a unit-economic standpoint. Watu's CEO Kaneps disclosed in 2017 a 98% repayment rate; by 2024–25 that figure had deteriorated as Kenyan informal incomes were squeezed and "more than half of the boda boda operators were struggling to service the loans," per Watu's own disclosure. M-KOPA's Nigerian general manager Babajide Duroshola told a Lagos audience in 2025 that the model is "not an interest-based model, we are a cost-based model" — the price covers the embedded enforcement infrastructure.

But this model has a corollary that economists understate. The targets are precisely those customers a bank or SACCO would not approve: low-income, often illiterate or semi-literate, daily-earning. The 2024 FinAccess survey found that defaulting rose from 10.7% to 16.6% of borrowers between 2021 and 2024; an IJRISS study published in 2025, drawing on the 2024 FinAccess data, found that "an illiterate borrower is 4.5% more likely to default" and that "gambling and sickness yielded 8.4% and 13% respectively on the probability of default."

Social and economic impact.

Kenya has 1.2 million boda boda riders. Car & General's own sector study, states: "There are 1.2 million riders in Kenya. Nine out of 10 are used for commercial purposes, representing over one million jobs created." The same study confirms that the sector "also supports six million livelihoods indirectly, about 10% of the country's population." The sector generates Sh401.7 million in revenue per day. Asset finance is not the cause of the sector's expansion, but it has become its dominant economic structure. When a financed motorcycle is repossessed or stolen, three to five household dependents lose their primary income. When a financed phone is bricked, business calls, M-Pesa transactions, online classes (as in Oscar Nkulei's case at the Technical University of Kenya) and emergency communications stop in real time.

The human cost is still under-measured, but the available evidence points to serious borrower distress. When a financed motorcycle is repossessed or stolen, household income can collapse overnight. When a financed phone is locked, business calls, M-Pesa transactions, online learning and emergency communication can stop immediately. This is why asset finance should be assessed not only as credit access, but as a conduct-risk issue touching work, mobility and household resilience.

Who benefits — the capital structure.

Almost every major operator is foreign-owned or foreign-controlled. The issue is not foreign capital itself. Kenya needs investment in productive assets, but firms financing the phones and motorcycles of low-income workers must meet Kenyan standards on pricing, recovery, affordability, tax transparency and regulatory accountability. The firms financing the phones and motorcycles of low-income workers must meet the same standards expected of banks, SACCOs and licensed digital lenders.

• M-KOPA Holdings Limitedis headquartered in London. Its Kenya entity, M-KOPA Loans Kenya Limited, is the operating arm. Its US$250 million-plus 2023 financing was led by Japan's Sumitomo Corporation, Africa's largest bank Standard Bank, the International Finance Corporation, FMO of the Netherlands, British International Investment, US-based Blue Haven Initiative and Broadscale Group, Lightrock, and Generation Investment Management (Al Gore's firm).
• Watu Holdings Limitedis registered in Mauritius (per FMO project disclosures), with the operating Kenyan subsidiary Watu Credit Limited. The 29% associate stake is held by NSE-listed Car & General Kenya, originally acquired in 2017 for KSh 26.8 million.
• Mogo Auto Limitedis a subsidiary of Latvia-headquartered Eleving Group, governed from Luxembourg, with 47% of group portfolio in Continental Europe and 41% in Africa.
• Aspira is a wholly-owned subsidiary of Mauritius Stock Exchange-listed CIM Finance.
• Lipa Laterwas registered in Kenya but its principal investors — Cauris (Mauritius), Lateral Frontiers, Orbit Startups (Y Combinator-backed), Founders Factory Africa — were offshore.

Profits are repatriated. Tax-base implications, including the Mauritius and Luxembourg domiciles, are well known to Kenya Revenue Authority — the 2024 Kenya Tax Appeals Tribunal ruling on Car & General's deemed-interest treatment of Watu Credit is one of several disputes in this space.

The disconnect is not theoretical. M-KOPA's Sumitomo, Standard Bank, IFC and BII financing is "sustainability-linked"; its impact reports highlight 2.03 million tonnes of CO₂-equivalent emissions avoided since 2010 and 9-in-10 customers reporting improved quality of life. Yet the same disclosure shows that "more than half" of M-KOPA Kenya customers "are now earning more" — meaning a substantial minority are not, even after the embedded financing cost. M-KOPA's own answer — its right to brick the phone on default — is the structural reason its credit-loss numbers remain palatable to DFIs.

Global context and comparable action.

The UK Financial Conduct Authority has long argued for BNPL regulation; the Woolard Review of 2021 was followed by three rounds of HM Treasury consultation culminating in the May 2025 confirmation, the 14 July 2025 legislation, and the 15 July 2026 commencement date for FCA supervision of third-party BNPL lenders. The CFPB in the US has acted against Affirm-style operators on the question of dispute rights and the Fair Credit Billing Act. Australia's regime, fully effective from 10 June 2025, requires BNPL providers to hold credit licences, join AFCA, and make affordability assessments. India's RBI has gone further, banning first-loss default guarantees above 5%, requiring direct borrower-account disbursement, and tightening data localisation. China's regulators forced Ant Group to restructure its consumer-credit fintechs after the 2020 IPO suspension. The IMF and World Bank's Global Financial Stability reports have flagged emerging-market consumer credit fintechs as a source of household-vulnerability buildup.

Kenya's 2024 reform is therefore aligned with — but trailing — these jurisdictions. The Mogo class-action lawsuit currently before the High Court of Kenya, the Senate's 2023 special-committee call, the National Assembly's 2024 investigations and the December 2024 statutory amendment, taken together, mark the inflection point.

A motorcycle can create income. A smartphone can connect a trader to customers, payments, credit, education and public services. Instalment finance can help households acquire assets they could not buy upfront. The problem begins when the price of access becomes opaque, when the financed asset can be disabled without sufficient safeguards, and when repossession becomes easier than affordability assessment. A market that expands ownership while weakening borrower resilience is not inclusion. It is leverage with better branding.

Kenya is therefore at a useful but narrow policy window. The market is large enough to regulate, visible enough to understand, and still early enough to correct before harmful practices become entrenched. The question is no longer whether BNPL and asset finance should be supervised. It is how quickly Kenya can define the rules of responsible access before scale becomes the excuse for delay.

Recommendations.

For the Central Bank of Kenya, the National Treasury, Parliament, the Competition Authority, the Office of the Data Protection Commissioner — and for the Fintech Association of Kenya itself, which has both a self-regulatory opportunity and a reputational risk in this category — the following ranked actions follow from the evidence above.

Immediate (0–6 months):

1. Finalise the Non-Deposit-Taking Credit Providers Regulations 2025and bring all asset-finance, BNPL and PAYGO operators into the licensing regime — including Watu Credit, M-KOPA Loans, Mogo Auto, Aspira, Faraja/EDOMx, SpotIt and Power Financial Wellness. Set a strict licensing deadline (six months from gazettement) with public publication of licensed entities.
2. Mandate a single APR disclosure standardmodelled on India's RBI Key Facts Statement and the UK FCA's CONC sourcebook. Every quote — daily payment, weekly payment, deposit — must be accompanied by an effective annual percentage rate calculated on a reducing-balance basis, prominent on the receipt and in the contract.
3. Ban remote device locking as an enforcement mechanism for non-payment of more than 30 dayswithout a court order. Lock-on-theft and lock-on-SIM-change remain permissible.

Medium term (6–18 months):

4. Cap the effective annual rate on consumer asset-financeat the average commercial bank lending rate plus a defined spread (for example, CBR + 25 percentage points). Kenya's banks were subject to a statutory rate cap from 2016 to 2019; reintroducing one selectively for the asset-finance segment is constitutionally and economically defensible.

5. Mandate affordability assessmentsconsistent with the Australian "modified responsible-lending obligations" — appropriate to the small-ticket nature of the loans, but firm on income verification, existing-debt disclosure and a borrower-affirmed budget statement.

6. Restrict recovery practices. No physical repossession without notice and a court-recognised grace period of at least 14 days; outsource-collection agents to be licensed and bonded; recovery-related deaths and injuries to be referred to the Directorate of Criminal Investigations. Adopt the High Court's findings in the pending Mogo class-action as precedent.

7. Create a redress mechanism. Kenya does not have a Financial Ombudsman Service. Establish one — covering banks, SACCOs, microfinance institutions, digital credit and asset finance — funded by a small levy on regulated entities.

Structural (18–36 months):

8. Bring asset registration into the borrower's name from day one— registered jointly with the financier — and require the financier to discharge logbooks within 14 days of final payment. NTSA testimony in 2024 confirmed that this is not current practice.

9. Mandate disclosure of beneficial ownership and tax structure. Mauritius, Luxembourg and Cayman vehicles in the BNPL chain must be reported to CBK and to KRA, with country-by-country profit reporting.

10. The Fintech Association of Kenya (FINTAK) & other Associations such should adopt and enforce a sector-wide Code of Conduct— modelled on the Australian BNPL Code Compliance Committee — covering disclosure, affordability, recovery, complaints and remote-locking. Members who do not comply forfeit accreditation. This is the single most credible signal the industry can send before CBK does it for them.

A workable Kenyan standard should be simple: no BNPL or asset-finance product should be sold without a visible cash price, total repayment amount, annualised cost of credit, all fees, repayment schedule, lock or repossession conditions, complaint channel and hardship option. No device should be disabled without notice, audit trail and dispute pathway. No lender should rely on the financed asset as a substitute for affordability assessment. No provider should operate outside CBK’s perimeter simply because the loan is attached to a phone, motorcycle or household good.

Final Word.

Kenya does not need to choose between financial innovation and consumer protection. The harder task is to insist that innovation earns its social licence. BNPL and asset finance can help households acquire phones, motorcycles and other tools that support work, mobility and inclusion, but only if the market is built on clear prices, fair contracts, responsible affordability checks, lawful recovery and transparent data use. For policymakers, the moment is not to slow useful credit, but to define the rules before distress becomes the business model. For operators and investors, the test is whether access can be scaled without turning enforcement technology into a substitute for responsible lending. Kenya has already seen what happens when digital credit grows faster than public safeguards. BNPL should not be allowed to repeat that cycle under a friendlier name.

The task now is to stop treating every asset-backed loan as harmless BNPL, bring the sector fully into credit regulation, and ensure the next phase of financial inclusion is built on transparency, affordability and lawful enforcement rather than technical control.