A commercial relationship between Kenyan supermarket giant Naivas and buy-now-pay-later fintech FlexPay has escalated into a criminal investigation, ending with the arrest of two FlexPay executives over a disputed KES 31.2 million, worth roughly $231,000.
The dispute dates back to a partnership that began in 2021, when Naivas engaged FlexPay to allow customers to purchase goods and pay for them in instalments. Over about five years, the arrangement processed more than KES 3 billion in transactions, according to FlexPay’s court filings.
The relationship began deteriorating in early 2026.
On March 6, Naivas instructed its branches to immediately stop accepting FlexPay transactions, remove promotional materials and prevent FlexPay representatives from operating inside its stores. The supermarket cited ongoing operational challenges. Days later, its lawyers demanded more than KES 30 million from FlexPay, arguing that funds collected through the platform had not been fully remitted.
The amount subsequently rose to more than KES 31.2 million.
FlexPay disputed Naivas’ calculations. Its lawyers argued that the accounts could not simply be treated as unpaid customer collections because the two companies also had outstanding financial issues involving loyalty points, commissions and other transactions.
FlexPay also alleged that its systems had identified suspicious transactions involving Naivas employees. According to its lawyers, some transactions appeared to show purchases being entered at significantly higher values before later being reversed as typographical errors. FlexPay claimed its audit identified more than KES 300 million in transactions displaying this pattern, although the figures have not been independently verified.
That transformed the disagreement from a straightforward payment reconciliation into a much more complicated dispute over potentially suspicious activity.
Naivas sought the intervention of Kenya’s Directorate of Criminal Investigations (DCI), while FlexPay separately complained to authorities about what it described as misuse of the criminal justice system to resolve a commercial disagreement.
The two sides had a contractual dispute-resolution process involving negotiation, mediation and potentially arbitration. But they failed to reach an agreement on the amount owed or how the competing claims should be reconciled.
The matter eventually moved from correspondence between lawyers to police investigations.
FlexPay executives were questioned by the DCI, and investigators examined allegations of stealing by an agent. The company maintained that it had provided documents and financial records explaining its position.
Then, in September, FlexPay co-founders Martin Kariuki Maina and Johnson Gituma Mwangi were arrested in Nairobi. They spent time at a police station before being released on police bond. Their lawyers subsequently challenged the criminal proceedings and asked prosecutors to consider FlexPay’s allegations concerning Naivas employees.
The case raises a broader question for Kenya’s fintech sector: when does an unpaid commercial obligation become a criminal matter?
The answer will have implications beyond Naivas and FlexPay. Retailers increasingly depend on fintech companies to provide instalment payments and digital credit, creating complex financial relationships in which large amounts of customer money move between businesses.
The Naivas-FlexPay dispute shows how quickly those relationships can become contentious when reconciliation breaks down.
For now, the courts will have to determine whether the disputed KES 31.2 million represents a commercial debt, evidence of criminal wrongdoing, or a combination of competing claims. The arrests have made the case a significant test of how Kenya handles disputes at the intersection of retail, fintech and criminal law.
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