Firm bets on Sh1b financing to boost e-mobility adoption
Enterprise
By
Nanjinia Wamuswa
| Jul 31, 2024
Asset financier Mogo has invested Sh1 billion in funding injected by the US International Development Corporation (IDFC) to finance electric boda bodas and tuk-tuks at affordable interest rates.
The firm, which has lent out Sh20 billion for boda boda and motor vehicle loans and provided financial products to more than 120,000 Kenyans over the past five years, has announced plans to direct the injected funds towards financing EVs to increase the adoption of e-bikes and tuk-tuks in the country.
Mogo is focusing on financing e-bikes and three-wheelers, making various brands of EVs accessible to Kenyans in Nairobi and other parts of the country.
"This initiative aims to mitigate the impacts of global warming by reducing greenhouse gas emissions and economically empowers boda boda operators," said Rauls Leitis Business Development Project Manager at Mogo.
A substantial part of the funding will be used for customer purchases, allowing us to keep interest rates and loan requirements as low as possible.
Electric vehicles enable boda boda operators to earn at least Sh300 more daily than fossil fuel motorcycles. This increase in earnings is driven by cost savings from fuel and maintenance, coupled with the lower interest rates offered by Mogo for electric bodas.
Most popular electric boda bodas operate on a battery-swapping model, where an empty battery can be quickly exchanged for a fully charged one within minutes.
Kenya's e-mobility industry is already experiencing rapid growth, but the financing from DFC is expected to propel this growth further by ensuring that end-user financing remains attainable and affordable.
"For electric mobility, this support is even more crucial due to the higher upfront costs compared to fuel-powered bikes. To drive the adoption of electric mobility, Mogo offers lower interest rates for electric bodas and significantly reduces the required down payment compared to fuel bikes, enabling more boda boda operators to own electric bodas," noted Leitis.
The boda boda sector contributes significantly to greenhouse gas emissions in Kenya,
so transitioning to e-mobility is essential.
Additionally, Kenya's electricity production is currently more than 90 renewable, meaning that most of the electricity used to charge these vehicle batteries is clean.