NAIROBI: Mogo, the Kenyan finance organization facilitating small and medium businesses in acquiring second-hand cars, motorcycles, and tuk-tuks, has reached an amicable settlement with the Competition Authority of Kenya (CAK) and the complainants involved.

The bone of contention was dollar denomination loans that a section of customers had expressed concerns with.

The finance service provider has played a crucial role in the growth of small and medium enterprises in the country, providing opportunities for many young Kenyans for self employment.

In a statement shared with Kondele News, Mogo clarified that the option of acquiring loans in U.S. dollars was a choice made by customers and was never intended to exploit them.

Less than 15 percent of customers opted for dollar-denominated loans due to the lower interest rates.

“Dollar-denominated loans were one of the products offered by Mogo. This product had a lower interest rate compared to loans denominated in Kenyan shillings. Unfortunately, due to currency fluctuations, the repayment amounts for some customers increased,” the press release stated.

Mogo has therefore entered into a settlement agreement with the CAK and the four complainants who raised the issue with the regulatory body.

“It is important to note that this settlement agreement represents a goodwill gesture by Mogo rather than an admission of wrongdoing, as dollar-denominated loans are fully legal under the regulatory framework that Mogo adheres to in Kenya,” the statement further explained.

As a way forward, the rising finance service provider has decided to “stop issuing new dollar-denominated loans in Kenya effective May 2024.”