Kenyan police have arrested the founders of FlexPay, a save-now-buy-later fintech company, over the alleged theft of KSh31.2 million ($242,000) belonging to a major retail chain.
The Directorate of Criminal Investigations (DCI) said Martin Kariuki Maina and Johnson Gituma Mwangi were arrested in Roysambu, Nairobi, on Wednesday over allegations that they diverted money entrusted to them for onward remittance to the retailer.
According to the DCI, the two were acting as agents for the unnamed retailer and collected payments from customers who bought goods and picked them up from several of the retailer’s branches.
The agency said the funds were expected to be remitted to the retailer but investigators found that Maina and Mwangi allegedly diverted the money for their personal use, working with other suspects who are still at large.
“The funds had been entrusted to the suspects for onward remittance to the retailer,” the DCI said, adding that the suspects allegedly diverted the funds for their own use.
The two men are expected to be arraigned at the Milimani Law Courts and charged with stealing by agent under Section 283(b) of Kenya’s Penal Code.
The DCI said investigations were continuing, with detectives pursuing other individuals allegedly linked to the KSh31.2 million transaction.
The arrests come amid growing complaints from some FlexPay customers over delayed withdrawals and difficulties accessing money saved on the platform.
Recent reviews on Google Play have included complaints about lengthy withdrawal periods and poor responses from customer support. Some customers also reported waiting weeks for refunds after completing their savings targets.
In one complaint in July, a customer said a KSh15,000 refund requested in June had not been processed, while another complained that withdrawals were taking longer than expected.
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FlexPay operates a “save now, buy later” model that allows customers to make instalment payments for goods before collecting them from participating merchants. The platform also offers goal-based and group savings products.
The company was founded in 2017 and attracted investors by promoting its model as an alternative to traditional buy-now-pay-later services, which provide credit to consumers.
In 2023, FlexPay said it had more than 600 merchant partners and over 200,000 customers. It had also raised $785,000 from investors including Acacia Group, LoftyInc, Expert Dojo, Google Black Founders Fund and Renew Capital.
Gituma was identified by FlexPay in 2023 as a co-founder and chief operating officer.
The company has since expanded its services to include FlexPay Goals, which allows users to save towards specific targets, and FlexPay Chama, a group savings product.
The DCI’s current investigation relates to money allegedly collected on behalf of a retailer and has not established whether the allegations are connected to customer complaints about delayed withdrawals.
Maina and Mwangi remain in custody as investigators continue their probe and search for other suspects allegedly involved in the KSh31.2 million case.
About the Author
Cecilia Attah is a tech analyst with a degree from Benue State University. She covers tech news and startups at TechRegard with a focus on how technology is transforming Africa and shaping the global landscape.
