Boda boda financier rides on green wave to grow e-bikes ownership

Today, many riders are the actual owners, many of them courtesy of financing arrangements with companies such as Watu. 

“So roughly one out of ten were owners of the asset. And nine who were not owners did not have any means to own that asset. They rented from other people,” says Watu Credit Kenya Country Manager Erick Massawe.

The boda boda industry contributes approximately 3.4 per cent to Kenya’s Gross Domestic Product (GDP), with individual operators earning around Sh1,000 per day from an average of 15 rides. 

Business ideas

Many would-be riders are unable to pay upfront for motorcycles or access credit from mainstream lenders. This is where firms like Watu come in. 

According to Massawe, the idea to go into boda boda acquisition financing was hatched by the firm’s founders during a trip to Mombasa when they encountered a group of young men discussing business ideas.

The youths lamented that they may never be able to own motorcycles and had to keep renting them out from owners to do business. 

“That observation inspired the Watu story. The question was: can we create a business model based on financing, where people pay the same amount they would for renting, but over time, they become the owners of the asset? The goal was to approach this with a financially inclusive mindset—one that doesn’t require collateral or impose stringent demands,” says Mr Massawe.

According to him, the company’s success is measured by the number of small businesses and livelihoods it has helped start and support over the years.

“We have been extremely mission-oriented and customer-centric. This is why we say our mission is to empower entrepreneurs—by providing them with the means to own an asset, they become business people,” he adds.

Despite suggestions that the company may be charging high interest rates, which could disenfranchise borrowers and lead to defaults, Mr Massawe asserts the opposite.

“Our credit rates are reasonable because our customers are paying their loans and successfully becoming asset owners. This doesn’t happen by accident—it’s one of our business secrets,” he says.

“We offer a very customer-friendly and flexible loan arrangement, supported by an infrastructure that helps mitigate the risk of default. For example, our competitors don’t have a ‘Customer Success’ department. If a customer’s asset needs repair, and they can’t afford it, the asset can’t be used, meaning the customer can’t make money. We have a system in place where we repair the asset for them through a series loan, ensuring they can keep moving.”

Mr Massawe emphasises that this approach has lowered the risk of customers defaulting on their loans due to downtime caused by mechanical problems. “Operationally, our customers are well-covered. We’ve developed complementary products and services to support them,” he adds.

Mr Massawe notes, has shifted focus toward financing electric motorcycles, reducing its carbon footprint.

He says the company is leading this transition, particularly in markets like Rwanda and Uganda, where they no longer finance petrol-powered motorcycles.

“We are at the forefront of this transition. In Rwanda, our entire mobility product category is electric vehicles—we don’t finance internal combustion engine bikes,” he says. Watu has also piloted a vertically integrated business model, partnering with a bike manufacturer and a battery manufacturer, while they handle financing.

This has resulted in the financing of over 2,000 electric two-wheelers in Uganda. The uptake of electric bikes has been significantly higher in Uganda and Rwanda compared to Kenya, a fact the company sees as a valuable business lesson.

“What we’re learning in Uganda and Rwanda is shaping the future of mobility in Kenya. Now, we are financing electric bikes from various manufacturers, as we are brand-agnostic,” says Mr Massawe.

While there are concerns about the complexity of electric motorcycles, such as charging and reliability, Mr Massawe points out that they are easier to maintain due to fewer moving parts.

However, significant investment in infrastructure, such as charging stations and swap points, is required.

“This has necessitated heavy investment in infrastructure, but over time, it will become the norm. Our experience in Uganda, where we’ve built everything ourselves, gives us a template for scaling in Kenya,” he adds.

Mr Massawe also notes that Watu has received substantial government support in Uganda, including free land for their bike manufacturing plant.