Wabeh, a Kenyan BNPL provider, has stopped its credit operations with retail vendors. The company cited rising defaults, cash flow pressures, and a lack of central bank approval. This marks a major shift in Kenya’s pay-later lending landscape.
Read Also:Cloud Gaming Comes to Nairobi with Local Pilot
The startup had offered mobile phone purchases with an upfront deposit and flexible repayment plans. However, it struggled when fewer than half of financed buyers repaid their balances. This left vendors unpaid for devices already sold. Wabeh’s model depended on small daily or weekly payments, and missed repayments quickly strained its funds.
Retailers expressed concern. Many noted that Wabeh had paid them in advance but could no longer collect from buyers effectively. Wabeh supplied phones through partnerships with local retailers and device makers. That made the failures ripple across the supply chain.
Read Also:Kenya Rolls Out Standalone 5G Networks to Two New Cities
Lack of regulatory approval added risk. The company has operated without formal central bank clearance. Amid rising consumer debt and limited oversight, the pause reflects broader scrutiny of BNPL practices. Regulators in other markets have warned of risks tied to debt abuse and unclear consumer protections.
For Kenyan fintech, Wabeh’s troubles offer lessons. Sharking down defaults early matters. Startups must monitor repayment behavior closely. They also need clear legal standing and strong ties to regulators. Structured credit models must balance growth with careful risk management.
Customers now lose access to a growing credit option. Small businesses and vendors face delayed payments. Future users may become cautious about BNPL services overall.
Read Also:Mozilla Launches Privacy Tool to Block AI Tracking
Still, Kenya’s BNPL market continues to expand through other firms. Providers like those tied to mobile wallets and banks remain active. They often tie credit limits to existing payment accounts and enforce stricter checks to limit risk.
Wabeh’s case highlights key hurdles for fast-growing fintech. Without solid repayment frameworks and regulatory approval, growth can turn risky. As demand for flexible credit grows, industry players must adopt responsible practices and meet oversight standards.
