Safaricom has come under pressure after subscribers complained that money was being deducted from their M-Pesa accounts to clear Okoa Jahazi debts linked to other users. The dispute, which surfaced online, has raised fresh questions about consent and the fine print attached to mobile credit services.
In a post dated 2018-11-20, the company said the deduction only happens after a user goes through the USSD prompts and agrees to the repayment terms. Safaricom said that when a customer buys data for a number with an outstanding Okoa Jahazi balance, the system shows the bundle cost, the debt due and the total amount to be deducted.
One subscriber, identified as Lovely Lovel, complained on the firm’s Facebook wall: “Today a customer asks me to buy him bundles and I buy worth Sh50, then you deduct Sh275 from my M-Pesa account.” Safaricom responded on Twitter that if the recipient has an unpaid Okoa Jahazi balance, the buyer is notified and asked to accept or decline before the transaction goes through.
The backlash has also drawn in legal and policy voices. Mr Ali Hussein, an ICT lawyer and official at Kenya ICT Network (KICTANet), said the practice was troubling because it could expose a third party to another person’s liability. He argued that such exposure is ethically wrong, even where a user may have clicked through terms and conditions.
Safaricom’s Okoa Jahazi service gives eligible prepaid subscribers airtime advances of between Sh10 and Sh1,000, with a 10 per cent service fee charged on each request. The terms say the advance must be repaid within three days or the subscriber is blocked from the service for one week. They also state that Safaricom may withdraw the credit advance from any subscriber at any time and may change the credit terms without further notice.
The controversy comes as mobile lending continues to expand in Kenya. The latest Central Bank of Kenya (CBK) report cited in the article said 26 per cent of Kenyan subscribers are digital borrowers, up from 17 per cent of mobile service subscribers who reported taking loans in the previous three months last year.
CBK Governor Patrick Njoroge had earlier in the year called for tighter regulation of predatory fintech lending, noting that such providers had grown from a handful less than three years ago to almost two dozen. The Communications Authority of Kenya (CA) has also pushed for new guidelines, with Director-General Francis Wangusi saying last year that the regulator was discussing an inter-disciplinary unit with the CBK to oversee services that cut across several sectors.
