NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, June 12, 2014

Kenya: When the Consumers Federation of Kenya (Cofek) went to court seeking orders to cancel the Mobile Virtual Network Operator (MVNO) licence issued to Equity Bank through its subsidiary for mobile services, Finserve Africa Limited, it seemed the idea was about more than getting justice for the consumer.

The action was not consistent with the catchphrase often used by the downtrodden: “having one’s day in court”. For a long time, the courts have been exalted as the place where little guys stand up to big, powerful corporations and aggressors.

But the law, as someone once suggested, can be an ass and in the corporate world, the halls of justice, rather than shielding small or defenceless people, can sometimes be turned into a weapon to assault the very ones who are downtrodden.

According to reports in the media, Cofek through lawyer Henry Kurauka argues that the Communications Authority of Kenya (CAK) did not follow the right procedure in issuing the permit to Finserve Africa Limited and two other firms, Zioncell Kenya Limited and Mobile Pay Limited.

According to the plaintiff, CAK and the three companies did not conduct proper information and public education to enlighten consumers on the risks of engaging in mobile money transfers.

A key component of the evolution of communications services remains access to mobile banking services, with the latest Communications Authority of Kenya (CAK) report showing 26 million subscribers have so far been connected to mobile money transfer services. Safaricom leads with the lion’s share of the subscribers, commanding more than 80 per cent of the entire market.