Mogo’s lending practices in Kenya have come under sharp scrutiny following a recent court ruling that exposed exploitative terms in one borrower’s case.
In a judgment from the Small Claims Court in Thika, the court declared parts of Mogo Auto Limited’s operations illegal, highlighting how a KSh 400,000 loan quickly grew out of control despite significant repayments.
This decision adds to ongoing questions about the company’s methods and their impact on ordinary Kenyans seeking financial help.
The borrower in this case took out the loan in June 2022. He repaid KSh 299,369 before facing difficulties. Mogo then claimed he still owed KSh 677,381 and demanded a total of KSh 976,750 to clear the debt.
The court examined the details and found the effective interest rate reached about 86.4 percent, plus extra charges for monitoring, insurance, penalties, and other fees.
These additional costs were not properly justified or explained in a way the court could verify.
Judges applied the in duplum rule, which limits interest from exceeding the original principal amount. They rejected Mogo’s inflated demands and ruled that only KSh 100,631 remained outstanding after accounting for payments, plus court-rate interest.
The decision emphasized that debt collection should not turn into an instrument of unchecked accumulation that burdens borrowers unfairly. This case shows how quickly a manageable loan can become a heavy load when rates and fees stack up without clear upfront disclosure.
Mogo, part of the international Eleving Group, offers logbook loans, vehicle financing, and support for boda boda operators across several counties in Kenya. Many customers turn to such lenders for quick access to funds when banks are out of reach. Yet repeated complaints point to patterns that leave people paying far more than expected. In this instance, the borrower had already handed over nearly three-quarters of the original amount, but the balance kept growing due to the way interest and charges were applied.
This ruling fits into a bigger picture of regulatory actions against the company. In 2024, the Competition Authority of Kenya fined Mogo over KSh 10.8 million for false and misleading representations in loan agreements. Investigations showed cases where loans issued in Kenyan shillings had repayments calculated using US dollar exchange rates, exposing borrowers to currency swings that increased their burdens. Customers reported unilateral changes to interest calculations and hidden fees that were not clear at the start. The authority ordered refunds to affected individuals and required staff training on consumer compliance.
A class action lawsuit filed in 2025 by several borrowers, including Caroline Nderitu, Wilson Mbogo Gikonyo, and Joseph Muraya Wangari, seeks to represent thousands more. They allege systemic issues such as dollar-indexing of local currency loans, compulsory insurance add-ons with unclear costs, and aggressive repossession without proper process. These practices reportedly affect gig workers and others who rely on vehicles for daily income, sometimes leaving them without assets after partial repayments.
Critics argue that such operations target vulnerable customers with promises of easy credit while the fine print and calculations shift the risk heavily onto borrowers.
In one reported example tied to complaints, individuals claimed paying nearly double or more than the principal yet still facing demands for additional sums. The Thika court noted the exploitative nature of the rates involved, describing them as oppressive when combined with unproven extras.
Mogo has faced calls to improve transparency in how loans are structured and communicated. The company operates in a competitive space where many Kenyans need asset financing, but trust erodes when balances balloon unexpectedly or recovery tactics feel heavy-handed. The recent judgment serves as a reminder that courts can step in to protect borrowers from terms that go beyond reasonable commercial practice.
For those considering similar loans, the case underscores the importance of understanding full terms, including how interest is calculated and any currency or fee implications. Regulators continue to monitor the sector, but individual court wins like this one highlight the human cost when practices cross into exploitative territory.
