Watu Credit defends business model amid probe

Boda-boda financier Watu Credit has strongly defended its operations in Kenya, noting that its “Buy-Now, Pay-Later” services seek to enhance financial inclusion across the country.

Watu Credit, a subsidiary of Watu Africa, has been fighting media scrutiny over its “Buy-Now, Pay-Later” equipment acquisition model, even drawing the attention of the House Committee on Finance and National Planning.

“We provide various asset finance solutions that allow underserved communities to access economic production opportunities,” the company, which operates in DRC, Uganda, Sierra Leone, Tanzania, Nigeria, and Rwanda noted in a statement.

The firm added that backed by leading global impact investment agencies, it remains committed to offering non-bank financial services that foster economic inclusion and national development.

“We do not impose any additional unilateral charges, fees, costs or interest outside the terms of our written contracts. A customer may also opt to prepay their loan and outstanding interest without incurring any penalties,” Watu Credit told MPs.

At the moment, the firm service offerings include Watu Boda (two and three-wheeler financing), Watu Simu (smartphone financing), Watu Shule (Kenya’s first motorbike riding school), and Watu Gari (car financing).

The firm’s hire purchase price covers the asset’s retail cost and value-added services, such as GPS tracking, logbook transfer, customer services, and a 24/7 emergency response unit, the company explained. The company added that at the moment records show a hire purchase portfolio exceeding 96 percent, and over 70 percent repeat clients.

Read also: Senate clears Watu Credit of any wrong doing

Dispute resolution and regulatory regime

“Where issues cannot be resolved through our internal processes, our contracts provide for the referral of disputes for resolution to the Kenyan courts. We are happy to report that since the commencement of our operations, we have not had any disputes filed in any court by ourselves or by our customers.”

Addressing persistent concerns about motorbike theft, Watu Credit noted that it works with security teams to tackle any challenges and so far, out of their 400,000 financed motorbikes, less than 100 have been reported lost.

In 2023, over 100 motorbikes were reported stolen, and the firm’s fleet management and tracking system helped to recover 96 of them.

Overall, Watu Credit noted that it has so far paid over Kes5 billion in taxes while extending financial inclusion services to over 1.3 million customers.

Additionally, the firm has issued over 500,000 loans to bike buyers as well as 800,000 loans for the acquisition of smart devices on hire purchase.

Before the House Committee, the company was pressed to explain the law under which it operates in the Kenyan market.

“WATU is not specifically regulated under any specific Act or Regulations but adheres to general statutes such as the Consumer Protection Act, the Data Protection Act, the Employment Act and common law principles applicable in Kenya,” the company said.

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