FlexPay Directors Arrested Over Theft and Fraud Allegations Amid Mounting Customer Complaints

For three years FlexPay sold Nairobi a fintech fairy tale: a save-now-buy-later platform built on the promise that Kenyans did not need more debt, only more discipline, and that the company holding their money in the meantime could be trusted with it. That promise collapsed on 1 September when detectives from the Directorate of Criminal Investigations walked into Roysambu and walked out with two of Flexitech Group Limited's own directors in handcuffs, accused of quietly diverting Sh31,213,700.95 that belonged not to the company, not even to its customers directly, but to one of the very retail chains FlexPay had spent years courting as a partner. Martin Kariuki Maina and Johnson Gituma Mwangi, the latter a co-founder and the company's long-serving chief operating officer, are now expected to be arraigned at the Milimani Law Courts on a charge of stealing by agent under Section 283(b) of the Penal Code. The DCI says the pair, acting as collection agents for a major retailer, pocketed money that customers had already paid for goods they had collected off the shelf, money that was never theirs to keep and was never supposed to touch FlexPay's own accounts for longer than it took to pass it on. A BUSINESS BUILT ON HOLDING OTHER PEOPLE'S MONEY Flexitech Group Limited was founded in 2017 by Richard Machomba, who remains chief executive and the company's public face, alongside Gituma, Dennis Karanu on finance and Moses Gathecha Wakanyi on technology. The pitch was elegant and, for a while, investors bought it: rather than extend credit the way buy-now-pay-later apps do, FlexPay would digitise the old East African lay-by, letting shoppers pay for a fridge or a school uniform in instalments and collect it once the balance was cleared. No interest, no credit checks, no lender status, a company that in its own marketing has always insisted it is merely a payment facilitation and savings platform. That framing did real work for FlexPay. It let the company sit outside the perimeter that usually catches deposit-takers and digital lenders in Kenya, even as its products, FlexPay Goals for individual savings targets, FlexPay Chama for group pots, and a maternity-focused Mama Prime, did precisely what banks and saccos do: collect money from ordinary Kenyans and promise to give it back, with interest of trust rather than interest of shillings, at a later date. By September 2023 the company was telling TechCrunch it had signed more than 600 merchant partners and served over 200,000 customers, part of the pitch that carried it into TechCrunch's Startup Battlefield 200 that year and, later, into the second cohort of Safaricom's own Spark Accelerator in October 2025, barely eleven months before its co-founder was led into a police cell. 'We just digitised it.' Richard Machomba, FlexPay co-founder and CEO, TechCrunch, 2023 THE MERCHANT LIST THAT NOW READS LIKE A LIABILITY The retailer at the centre of the DCI's case has not been named, and the agency has declined to say which of FlexPay's partners is short Sh31.2 million. But FlexPay's own promotional material narrows the field considerably. As recently as March 2026, Gituma himself told industry outlet TechArena that the company's merchant network included leading brands such as Naivas, Quickmart, Hotpoint, Moko, LG, MIKA, Car & General, Azon and others, brands he was actively using to sell FlexPay's credibility to the market months before he was accused of stealing collections from one of them. Whichever chain filed the complaint that triggered the DCI's Roysambu operation, the arithmetic is uncomfortable for FlexPay either way: a fintech that built its reputation on a roster of Kenya's biggest supermarket and appliance retailers is now explaining to at least one of them where its till collections went. MONEY THAT WOULD NOT COME OUT The retailer theft did not emerge from nowhere. For the better part of two years, FlexPay's own customers had been describing, in increasingly frustrated detail, a company that was slow to give back money it did not dispute owing them. Complaints traced back to December 2024 already followed a pattern: disbursements promised for a fixed date that never arrived, staff blaming system errors, WhatsApp messages and phone calls that went unanswered, and in at least one case a saver whose account was mysteriously linked to a phone number she said she had never used. By July 2026 the pattern had hardened into a public pile-on. One customer told a Kenyan blogger he had waited six weeks for a Sh13,000 refund. Another, writing in August, said Sh24,700 owed to her since July had left her unable to pay her child's school fees, with calls to customer service going nowhere. Google Play reviews of the FlexPay app, sitting around 3.5 to 3.7 stars across hundreds of ratings, tell the same story in miniature: a Sh15,000 refund requested in June still unresolved by July, a customer complaining of a withdrawal fee charged on money the company was already late in returning, and savers who had hit their goals only to be left waiting. By late July, a complainant writing to Nyakundi Report accused the company's leadership directly, describing a maturity payout withheld despite repeated withdrawal requests and a product paid for in full that had not been delivered a month later, calling on Machomba and Gituma by name to explain the pattern. 'Wamekataa na pesa za watu wengi.' A FlexPay customer, quoted by Nyakundi Report, July 2026, translation: 'they have refused many people's money' The DCI has been careful to say its investigation concerns only the alleged theft from the retailer, and that it has not established any link to the customer withdrawal complaints. That caution is legally correct and journalistically almost beside the point. Both stories, the merchant's missing Sh31.2 million and the savers' delayed refunds, describe the identical operational failure: FlexPay collected money it did not own outright and was slow, or in the retailer's case allegedly unwilling, to let it go. THE GREY ZONE FLEXPAY BUILT ITS BUSINESS IN FlexPay's terms and conditions, last updated in March 2026, state plainly that the company is not a lender, credit provider, or financial institution, and that it does not extend credit or charge interest. That single sentence has done more for FlexPay's regulatory life than almost anything else about the business. Kenya's Central Bank licenses and supervises banks, microfinance institutions, money remittance providers and payment service providers, and its 2021 Digital Credit Providers regime was built to catch the mobile lending apps that charge interest on unsecured loans. FlexPay charges no interest and lends nothing, so it has largely sat outside both regimes, even while performing a function that looks, to an ordinary saver, indistinguishable from what a bank or sacco does: take money now, promise to return goods or cash later. The same terms document is candid about where FlexPay does accept responsibility. The company commits to independently handling and resolving all customer disputes relating to payments, failed transactions, incorrect debits or credits, and savings balances, language that leaves FlexPay nowhere to hide when a saver's matured Chama payout does not arrive. It is a company that has spent years telling regulators it is not in the business of holding other people's money, while telling customers, in the same document, that it is solely responsible for the money it holds. WHAT STEALING BY AGENT ACTUALLY MEANS Section 283(b) of the Penal Code is not a technical footnote. Stealing by agent criminalises the conversion of property that came into a person's hands precisely because someone else trusted them to hold or pass it on. The DCI's own language, that the funds had been entrusted to the suspects for onward remittance to the retailer, is a description of agency, not of ordinary commercial dispute. If proven, it establishes that Flexitech's own directors treated money in transit through their systems as money they were entitled to spend. For a company whose entire commercial pitch rests on the idea that money placed with FlexPay is safer, or at least more virtuous, than money borrowed from a lender, an indictment built on exactly that premise, that entrusted money went missing, is close to an existential problem. It does not require a court to link the retailer case to the customer complaints for the reputational damage to be total. Both point to the same question: when money reaches Flexitech Group Limited, does it ever reliably leave. THE INVESTORS WHO VETTED A COMPANY NOW IN HANDCUFFS FlexPay did not build its runway alone. By 2023 the company said it had raised roughly $785,000 from a syndicate that included Acacia Group, LoftyInc, Expert Dojo, Google's Black Founders Fund and Renew Capital. Corporate research platform PitchBook's 2026 profile of Flexitech Group puts total capital raised nearer $1.55 million across 17 backers, adding DeveloPPP Ventures and Safaricom's own Spark Accelerator Program to the list of names that put money and credibility behind Machomba and Gituma. Safaricom's accelerator, run in partnership with M-PESA Africa and Japan's Sumitomo Corporation, selected FlexPay from more than 200 applicants for its second cohort in October 2025, a vote of confidence in the company's fintech credentials issued less than a year before one of its own directors was arrested on a theft charge. Headcount trackers that once put FlexPay's team above fifty now list it in the mid-thirties, a company that, on paper, has been quietly shrinking even as its public narrative of expansion into Uganda and Nigeria continued. Machomba, the chief executive whose name is on every press mention of FlexPay's mission, has not been arrested and has not been publicly linked to the theft charge. The company has issued no detailed statement beyond the boilerplate already sitting on its own website. The app remained downloadable, the paybill number 555699 and till number 700164 remained live, and the merchant partnerships remained listed, even as the mugshots of two of its own directors circulated. The DCI says other suspects connected to the Sh31.2 million are still being pursued. FlexPay is not the first Kenyan buy-now-pay-later alternative to run into trouble; competitor Lipa Later has already shut down. What makes this case different is that the allegation is not that FlexPay's model failed commercially. It is that the people running it are accused of doing, to a retail partner, exactly what months of customer complaints already said the company was doing to ordinary savers: taking money that belonged to someone else and not giving it back on time. Kenyans who have been waiting since June and July for refunds FlexPay does not dispute owing them will recognise the DCI's language better than most. They have been asking Flexitech Group Limited the same question for the better part of a year: where did the money go.