By Gitahi Ngunyi
@gitahi_ngunyi
Digital asset financing firm, Watu Credit recovered 96 motorbikes out of the 100 reported lost last year. The four that were not recovered were fully settled by insurance firms the company works as underwriters for the risk of theft according to a 22 page blow by blow response yesterday to the questions raised by National Assembly committee on Finance and Economic Planning to the firm on its operations.
The firm said recovery was made possible by utilization of technology and the support from National Police Service.
“Using our fleet management and tracking solution, 96 bikes were successfully recovered with the support of the National Police Service. The missing bikes insured by several leading insurance providers have also been fully settled, allowing our clients to remain in business,” said firm adding that 100 bikes had been reported stolen out of the more than 400,000 bikes it has financed.
The firm has been on Parliament radar since late last year when members of the committee on Trade and Industrialisation led by Nandi Senator Samson Cherargei called for the firms investigation following claims in the public that the firm was colluding with organized gangs to steal motorbikes it had financed.
Watu Credit said in its response that it intensified close collaboration with security enforcement and sector stakeholders to stem the vice and growing risk of suspected organised crime elements perpetuating motorbike theft.
“Where reports are made, we cooperate with investigative and insurance companies to ensure speedy resolution,” the firm told the committee.
In the summons by committee to the company through, Erick Massawe, the firm’s country director for Kenya sought answers to seven specific questions. The committee sought to know the regulatory regime company operates in and the regulatory authority responsible. The committee also sought to know the interest rate charged by the firm on boda boda lending and the basis of this rate. Other questions include the nature of other financial services offers and whether it has received and acted on complaints of malpractice in the company. Further the committee sought to know the insurance regime available to the borrowers in the firm.
In regards to the regulatory environment the firms operates and the regulator it is accountable to, the firm said it is not a deposit taking microfinance institution or a digital credit provider but an asset financier and therefore is not qualified to be regulated by the Central Bank of Kenya under the Banking or Deposit Taking Microfinance Institutions Acts.
Interest rates
On interest rate the company charges on motorbikes it has financed, the firm told the committee that its rates are based on a meticulous process and market research that is aimed at ensuring customers get the best deal they can in the market having regard to the highlighted rules of common law and the commercial risk involved.
“It is noteworthy that WATU is the leading provider of credit in the boda boda business and this is not a coincidence. The market and customers trust WATU and this is a testament to WATU’s vision and mission and the numbers speak for themselves,” said the firm in the response.
Complaints handling
The firm said it has implemented a robust complaints handling mechanism and provided a breakdown of how it handled complaints last year. During the reported period, the firm 468 complaints received complaints in its physical locations ranging from fraud against the company, unethical conduct and malpractices against customers.
“Of the reported cases, 192 (41 percent) were substantiated, of which 181 cases (94 percent of all substantiated cases) have been closed with internal disciplinary actions taken against erring employees. The disciplinary actions range between formal warnings and terminations,” said the firm.
Through online platforms we have received a total of 5,586 customer complaints over the past one year with 4,405 (79 percent) having been resolved, while the existing 1,181 (21 percent ) are ongoing.
“Quality assurance surveys are conducted for all resolved complaints, to ensure that our customers who had raised the complaints are satisfied by the outcomes and resolutions and that they received first rate quality of service during the dispute resolution period. For all open unresolved cases, our customers are given weekly updates via SMS on the status of the issue, until completely resolved. These include inbound telephone channels (59 percent being complaints), Email and Social Media Platforms (13 percent being complaints), physical footprint, physical support provided at the branches, retail outlets and at the storage locations (comprising 28 percent) amongst others,” the firm explained.
Insurance
The firm told the committee it facilitates the provision of comprehensive insurance policies to its customers, covering the financed assets, passengers and third parties against financial loss. The insurance policies are provided by licensed service providers regulated by The Insurance Regulatory Authority (IRA) in Kenya. Comprehensive insurance policy provides insurable coverage for a duration of one year for the motorbikes (2 wheelers) and for one year with automatic renewal for the second year for the Tuk Tuk (3 wheelers).
“In the unfortunate event that WATU’s customers are involved in an accident, once reported, WATU collaborates and provides support to the customer by initiating and processing the insurance claim. To this end, WATU has invested in a dedicated team of insurance professionals and technology necessary to support its customers in matters related to insurance.,” the firm said.
Customer protection
To protect its customers, the firm said its procedures are in line with the customer protection and competitions of Kenya. The procedures are informed by principles such as engaging in ethical business practices and promoting customer confidence, empowerment and developing a culture of customer responsibility. Other principles include ensuring customer awareness and information and encouraging responsible and informed consumer choice, avoiding unconscionable, unfair, unreasonable, unjust and otherwise improper trade practices, avoiding deceptive, misleading and fraudulent conduct; and providing an accessible, consistent, effective and efficient system of redress for customers.
Performance
The firm says it has financed has over 500,000 loans for mobility assets, 800,000 loans for smart connected devices and has contributed over Sh5 billion KES in taxes, contributing directly to Kenya’s fiscal well-being. Watu Credit is a Pan-African asset financing registered in Kenya in 2015. The firm has operations in seven African countries, with Kenya serving as our leading market. Its asset finance offerings include petrol and electric vehicles through WATU Boda and WATU Gari. It also finances acquisition of smart connected devices such as smartphones and tablets through WATU Simu and supports road safety through its pioneering driving school financing initiative through WATU Shule.
The firm operates with a brand agnostic approach to our mobility and smart connected devices products, working with a network of over 500 dealers.
In December last year, Senate cleared the firm on any wrong doings in the allegations after the firm’s Chief Executive Officer Andris Kaneps appeared before the committee. But the claims resurfaced earlier this month in public prodding the National Assembly’s committee to carry out its own investigations on firms operating Buy Now, Pay Later business models.
Through its committee on Finance and Economic Planning, the National Assembly is seeking to establish evaluate measures put in place to ensure the interest, fees and penalties charged But Now Pay Later services adhere to existing statutes and consumer protection safeguards. It is also seeking to establish whether credit providers using the model are recognized as digital credit providers under the Central Bank of Kenya Act and the Digital Credit Provider Regulations
Further, the committee is assessing the gravity of systemic risks posed by widespread and unregulated adoption of the model by operators including over – indebtedness, default rates and the financial stability of consumers, as well as reviewing existing regulations governing services by the model operators to identify any gaps and areas for improvement.
