Wabeh, a Kenyan buy-now-pay-later (BNPL) business, confirmed on July 17, 2025, that it has not stopped operations but reduced activities with certain vendors to streamline its credit risk procedures and concentrate on high-potential geographic areas. The decision follows an uptick in customer defaults and comes as Kenya’s BNPL industry faces heightened regulatory focus.
Strategic scaling to strengthen underwriting
Wabeh’s Chief Growth Officer, Raul Martinez, explained that the company is streamlining operations to concentrate on fewer, more profitable merchant partnerships rather than spreading resources thin across numerous smaller vendors with irregular sales. “We chose to concentrate on specific geographic areas and deepen our investment in refining our data-driven underwriting models,” Martinez said in a statement to Tech Cabal on Monday.
The company paused part of its vendor network which began July 5, but reassured that all active and paused merchants have been fully compensated and operations will expand again in Q4 2025 after upgrades to its models and infrastructure are implemented. Wabeh continues to allow customers to buy smartphones via deposit and flexible installments despite facing higher default rates recently, with some retailers reporting that less than half of financed devices have been repaid. Wabeh claims its non-performing loan rate is 7–9 percent, below the sector average of 15–30 percent.
Navigating regulatory pressure amid market shifts
Kenya’s BNPL sector, valued at over $1 billion and growing fast, is under increasing scrutiny. Traditional digital lenders now face Central Bank of Kenya (CBK) regulations, and pending legislation, the Business Laws (Amendment) Bill, 2024, aims to explicitly bring BNPL providers like Wabeh under CBK oversight by redefining “credit provider” to include instalment financing.
Wabeh’s move to slow its rollout and improve underwriting aligns with wider efforts in the sector to address rising loan defaults and regulatory demands. The company seeks to balance continued market presence with risk management, avoiding exposure that contributed to earlier repayment issues without entirely exiting operations.
This course correction illustrates how emerging BNPL firms in Kenya adjust business models to maintain viability in an evolving legal and financial environment, betting on improved risk assessment and market selectivity to sustain growth and consumer trust.
Editor’s note: This story has been updated to clarify that Wabeh did not cease operations but has instead scaled back vendor activities to focus on specific geographic areas and to refine its data-driven underwriting models.