Mogo, a leading financier of assets in East Africa has committed Sh1 billion in funding from the US International Development Corporation to finance electric boda bodas and tuk tuks at affordable interest rates for scaling up EV adoption in Kenya.
Mogo has lent out Sh20 billion in the last five years to boda-boda and motor vehicle loans, extending relatively cheap financial products to over 120,000 Kenyans. With the new funding, the firm is eyeing wider distribution of EVs across the country.
“Mogo is focusing on financing e-bikes and three-wheelers, facilitating access to various EV brands by Kenyans in Nairobi and other parts of the country. The move remains key to mitigating global warming through a reduction in greenhouse gas emissions while economically empowering boda boda riders,” said Rauls Leitis, Mogo Business Development Project Manager.
Lower interest rates coupled with reduced loan requirements have a view to making EV ownership more affordable. The industry has it that electric vehicles enable boda boda riders to earn at least Sh300 more daily than their counterparts using fuel guzzlers. This stems from cost savings resulting from fuel and maintenance, coupled with favorable loan terms by Mogo for electric bodas.
Most electric boda bodas run based on a battery-swapping model whereby operators could quickly replace an empty battery with a fully charged one. Coupled with this convenience, the financial muscle from IDFC is expected to further catalyze the growth of the industry in e-mobility in Kenya.
Mogo offers tailor-made services to ease boda boda operators’ transactions, including financing that most may otherwise not have the capacity to access through regular banks. “Given that they are relatedly more expensive at the front end compared to fossil-fuel-powered bikes, this support is even more important for e-mobility. Mogo helps drive electric mobility adoption through lower interest rates for electric bodas, and dramatically reduces required downpayment compared to the fuel bikes, in efforts to ensure more boda boda operators own electric bodas,” he said.
The boda-boda component in Kenya contributes a lot to GHG emissions; hence, e-mobility is important to reduce it and attain the environmental goals in the country. For instance, Kenya intends to be a net zero emitting nation by 2050, and this initiative supports e-mobility; more than 90% of electricity production from this country is renewable; hence, Charge EV Batteries are clean and efficient.
Mogo provides an in-depth onboarding process that enables the new EV owner to understand the differences between fuel-powered and electric bikes, proper handling and battery swapping procedures. This step toward education is very important if a seamless transition to electric mobility is to be driven.