Mogo Enters Settlement Agreement With CAK And Customers With Dollar-denominated Loans

Mogo has entered into a settlement agreement with the Competition Authority of Kenya (CAK) and its customers with dollar-denominated loans.

This follows complaints lodged with CAK early this year after the customers’ loans increased following the weakening of the Kenya shilling against the US dollar and inflation.

In a statement on Friday, October 4, 2024, the lender also announced that it had stopped issuing dollar-denominated loans effective May 2024.

“In reference to the settlement we have entered into with the Competition Authority of Kenya, Mogo was guided by our values that the welfare of the customer is paramount. Dollar-denominated loans was one of the products Mogo was offering to our customers. The product had lower interest rate as compared to Kenyan Shilling denominated loans. Less than 15% of all Mogo customers by free choice had taken dollar-denominated loans. Unfortunately, due to currency fluctuations, loan repayment amounts for part of such customers increased. When complaints were raised through CAK, Mogo decided to enter into a settlement agreement with the CAK and the complainants,” the company stated.

“It is important to note that the settlement agreement means a goodwill settlement by Mogo rather than Mogo being fined for wrong behaviour due to dollar-denominated loans being fully legal as per the regulatory framework to which Mogo adheres in Kenya.”

The company is known for providing financing options for used cars, logbook loans, boda bodas, and tuk-tuk loans for Kenyans.

“Since our establishment, we have been providing affordable financing options for used cars, logbook loans, Boda Boda, and Tuk Tuk loans for Kenyans, contributing heavily to upward mobility of Micro, Small and Medium Enterprises (MSMEs) and the financial inclusion of many Kenyans,” the statement added.