MOGO Finance, a digital lender operating in Kenya, is facing renewed scrutiny after a video circulating online highlighted allegations of hidden charges and exploitative loan terms.
A borrower who sought KSh 150,000 to cover his mother’s hospital bills claims he was misled into taking a loan that was later pegged in US dollars. He says MOGO representatives promised fast approval within 30 minutes, a pitch echoed in the company’s advertisements for its “Super Flexi Car Financing” product. However, after disbursement, he discovered the repayment was tied to the dollar exchange rate, which had risen sharply. Unable to meet the repayments, he lost his vehicle to repossession.
The borrower’s claims appear to contradict MOGO Kenya’s September 5 Facebook post, which stated: “Myth: MOGO loans are in USD… Fact: All loans are in Kenya Shillings only!”
Other customers have also come forward with grievances. One said he borrowed KSh 270,000 and has so far repaid KSh 459,000, yet still has an outstanding balance of KSh 274,000. Another claimed he took a KSh 400,000 loan and ended up paying KSh 1.8 million while still owing the company money.
A Nairobi-based lawyer has even claimed that his office is handling more than 20 files involving MOGO clients, most of them linked to undisclosed fees, ballooning balances, and repossessions.
MOGO has not issued an official response to the latest allegations.
Regulatory Action and Past Fines
MOGO Auto Limited was licensed by the Central Bank of Kenya (CBK) as a digital credit provider on June 27, 2024, under the Digital Credit Providers Regulations, 2022. This means it operates under CBK oversight. However, CBK has not launched an investigation into the complaints.
Court records show that MOGO Finance has faced a string of disputes with clients in recent months. Previous cases include Bernard Musite Vs MOGO Finance, Hannah Njeri Ngugi Vs MOGO Finance, and Eddie Kamande Maina Vs MOGO Finance Kenya.
In October 2024, the Competition Authority of Kenya (CAK) fined MOGO Auto KSh 10.85 million and ordered it to refund KSh 344,939 to three customers. The penalty followed complaints that the company altered loan agreements after disbursement and used different dollar exchange rates without informing borrowers. CAK found MOGO guilty of false representation and unconscionable conduct, breaching the Competition Act.
Loan Structure and Charges
According to its disclosures, MOGO structures loans around reducing balance interest rates, with monthly rates ranging from 2.5% to 5.75% depending on the borrower’s profile. In cases of default, an additional 0.5% to 1% daily penalty is charged on the outstanding principal.
Borrowers are told they receive the full loan amount, but some charges are added to the principal and spread across installments. These include a processing fee of about 7%, an application fee of around 10%, valuation fees, and tracker fees. Late payments attract daily penalties equivalent to 1% of the installment, while repossession and recovery may cost up to KSh 10,000 plus daily storage fees.
MOGO advertises repayment flexibility, offering weekly or monthly plans, with loan terms ranging from six months to five years. Payments are typically made through M-Pesa Paybill. Borrowers are allowed to settle early without penalties if advance notice is given.
Repossession rules are strict. Vehicles may be seized if borrowers default, tamper with the GPS tracker, or take the asset outside Kenya without written consent.
The In Duplum Rule
Kenya’s in duplum rule limits the accumulation of interest once it equals the outstanding principal. For example, if a borrower takes KSh 10,000, the maximum interest that can accrue is another KSh 10,000. After that, no more interest is added. The principle is meant to shield borrowers from excessive interest on defaulted loans. Some of the borrower complaints against MOGO raise questions about whether this rule is being observed in practice.
Company Profile
MOGO Kenya is part of Eleving Group, a Latvia-based fintech operating in 17 countries. In
Kenya, it finances used cars, logbook loans, boda bodas, and tuk-tuks. Its “Super Flexi Car Loan” is marketed as available for vehicles of any age or make, with up to 80% financing of the car’s value and repayment periods of up to 24 months.
For boda and tuk-tuk riders, MOGO advertises daily repayment rates, from KSh 236 for VIP boda loans to KSh 521 for scooters, with loans structured to cover both new and second-hand purchases. The lender also markets salary-based loans and government employee check-off loans.
The company’s advertising highlights affordability, transparency, and speed of approval, with campaigns promising loans in “as little as 30 minutes.”
Jefferson Wachira is a writer at Africa Digest News, specializing in banking and finance trends, and their impact on African economies.