Why boda boda riders could pay less as MPs push to end ‘never-ending’ motorcycle debts

Boda boda riders could benefit from reduced motorcycle costs if the Kenyan Parliament extends the "in duplum" rule to motorcycle financing companies. This rule, meaning "in double," currently prevents interest from accumulating indefinitely, but extending it could shield riders from ongoing interest and charges once they fall behind on payments.

The proposed change aims to limit additional interest accumulation, provide more predictable financing costs, and create a clearer path for riders to fully own their motorcycles. A petition by the Kenya Bodaboda Riders and Owners Association has highlighted issues like high interest rates, undisclosed loan terms, aggressive debt recovery, and repossession of motorcycles shortly after default.

These practices leave riders without their motorcycles and income while debts persist. The in duplum rule, if applied to motorcycle financing, could limit interest to the outstanding principal amount, reducing the total repayment amount and preventing small repayment problems from ballooning into larger debts. Justice and Legal Affairs Committee Chair George Murugara said MPs would assess whether the rule can be applied to motorcycle financing arrangements and question the legal basis for certain interest charges.

Majority Leader Kimani Ichung'wah emphasized the need to stamp out predatory lending practices against boda boda riders, pushing for stricter regulation and deregistration of non-compliant companies. If stronger rules are introduced, motorcycle-financing companies may face increased scrutiny over charge disclosure, repayment contract structure, asset recovery, and insurance-related claims.

For riders, the potential outcomes include less runaway interest, greater transparency, and a higher likelihood of completing repayments and retaining their motorcycles.