Mogo Auto Kenya Fined Kes. 10.8 Million by CAK for unfair Lending Practices.

In a landmark decision, the Competition Authority of Kenya (CAK) has imposed a substantial penalty of KES 10,851,473.20 on Mogo Auto Limited, a subsidiary of the international FinTech company Eleving Group, for violating the Competition Act CAP 504.

This ruling sends a clear message to the fintech industry about the critical importance of ethical business conduct and consumer protection. Mogo, which operates in eight Kenyan counties offering car financing and various loan products, was found guilty of false and misleading representation and unconscionable conduct against its customers.

The CAK's investigation, prompted by complaints from four customers between May 2023 and April 2024, uncovered several unethical practices:

• Adjusting loan terms from flat rate to reducing balance basis without proper disclosure
• Calculating interest in USD for loans disbursed in KES, exposing customers to foreign exchange fluctuations
• Unilaterally varying interest rates contrary to contract terms
• Failing to provide complete loan agreements to customers

As a result of these findings, Mogo has been ordered to refund three loan customers a total of KES 344,939, representing excess charges and exchange rate discrepancies

The CAK has also mandated corrective actions, including:

• Refraining from misrepresenting facts and engaging in unconscionable conduct
• Amicably resolving all pending complaints and handling future complaints expeditiously
• Undergoing consumer compliance training for all employees by August 30, 2025

This case serves as a crucial reminder for all fintech companies operating in Kenya and similar markets. It underscores the need for:

1. Transparent and ethical lending practices
2. Clear communication of loan terms in local currencies
3. Robust customer complaint resolution mechanisms
4. Proactive compliance with local regulations

As the fintech industry continues to grow and innovate, it is imperative that companies balance progress with responsibility. This ruling demonstrates that regulators are prepared to take strong action to protect consumers, even against well-established international players.The Fintech Association of Kenya encourages all members to review their practices in light of this decision and to prioritize ethical conduct and regulatory compliance in their operations. By doing so, we can build a stronger, more trustworthy fintech ecosystem that truly serves the needs of Kenyan consumers and businesses.