Watu Credit Facing Investigations By Kenyan Senate Over Rampant Boda Boda Theft

A Senate committee has raised questions about the activities of Watu Credit Limited and wants it investigated over complaints of exploitation and suspicious loss of motorbikes that it sold to boda boda operators.

The Senate Trade and Industrialisation Committee has demanded that Inspector General Japhet Koome appear before it to shed light on why the motorbikes disappear without any trace.

Concerns by the legislators follow numerous complaints from the firm’s customers who petitioned the Senate over rampant theft of motorcycles purchased from the credit company.

Nandi Senator Samson Cherargei had petitioned the House over what he termed as widespread complaints by boda boda and tuk-tuk operators against Watu Credit.

Cherargei said there is no way motorbikes from the firm would suddenly get stolen despite being fitted with trackers.

Tracking system

He said the company did not provide evidence to the committee that they had reported any theft cases of motorbikes.

“We are curious to know how the motorcycles are stolen yet they have trackers. Who disables these trackers? They have not provided anything to show they have reported cases of theft of their motorbikes,” said Cherargei.

Alleging foul play, his Uasin Gishu counterpart Jackson Mandago also questioned why a majority of the stolen motorbikes are ones whose payments are almost complete.

“It looks like there are people working under the Watu Credit tracking system who give out the information,” he said.

Senator Cherargei questioned why the company is quick to resell repossessed motorbikes from customers who default on payments.

He said a special committee should be formed to investigate the activities of the Pan-African asset financing company.

“I have more than 300 people willing to testify on this issue. I propose we form a special committee to look into this matter,” he said.

Watu Credit firm was also taken to task by the committee chaired by Kajiado Senator Seki Lenku over exorbitant interest rates of six per cent per month.

Seventy per cent

“This interest thing is where there is exploitation. This means that if a motorbike is retailing at Sh150,000 then they will pay more than Sh300,000 at the end of the hire purchase term,” said Lenku.

But, while defending the company, Watu Credit chief executive officer Andris Kaneps said their firm was mainly on the radar because almost 70 per cent of motorcycles sold on hire purchase in the country are financed by them making the probability high.

He said they have been able to finance more than 500,000 motorbikes making their market share the biggest in the country.

“Motorcycle theft is a rampant problem countrywide but a few cases are taken out of context. More than 50 per cent of motorbikes stolen are less than six months old as the thieves don’t like old motorcycles,” said Kaneps.

And to curb the rampant cases of theft, Kaneps is calling for the establishment of boda boda police unit to address the insecurity problems in the motorcycle sector.

The unit, he said, would be tasked with enforcing traffic rules, handling criminal case reporting and conducting community sensitization efforts.

According to Kaneps, customers only pay 50 per cent more in the hire purchase arrangement adding that the firm considers many factors including the listed cost of the item and customer service and support.

In addition, Watu explained that the economic challenges, driven by external factors such as war in Ukraine and foreign exchange rates, have seen significant increase in the cost of motorcycle imports, which is the largest cost factor in their pricing.

“If a customer is able to give us more collateral security then this reduces the interest rate by 70 per cent because we operate on a risk-based approach. The lower the risk, the lower the interest rate,” he said.

He, however, told the committee that they are piloting a flexible interest rate arrangement at 1.6 per cent per month to match the realities of the economy.

On repossession of the assets, he said that is the last resort as they gives its customers ample time and options to regularise their accounts before repossession.

“We operate with zero or minimum repossession because our target is to empower our customers. We have been very tolerant with them and repossession only happens to customers who are not collaborating with us,” said Watu Credit Country Manager Erick Massawe.