Asset financier, Mogo has secured a Kshs 1.3 billion (USD 10 million) loan facility from the US International Development Finance Corporation (DFC) to expand its electric vehicle financing portfolio in Kenya. The funding increases sustainable mobility options for self-employed boda boda operators and SMEs in Kenya.
“The financing is in sync with Mogo’s ESG strategy as we appreciate the future of mobility is electric. Kenya is a key market leader in this space and we’re keen on rolling out to SMEs and self-employed customers all across the country to help them upscale their livelihoods,” said Mogo country manager Domas Mineikis.
The seven-year loan comes shortly after Mogo opened its first-ever electric motorbike shop in Kenya, targeting the provision of affordable e-bikes to boda boda operators and promoting environmentally friendly transportation in the country.
Mogo Kenya, a subsidiary of the global multi-brand fintech company Eleving Group, is one of Kenya’s leading asset finance companies. It focuses on financing motorcycles, e-bodas, tuk-tuks, and cars, which are essential tools for mobility and income generation.
“DFC is doubling down on its commitments to Kenya’s development, with investments into e-mobility and energy, among other sectors. The U.S. and Kenya have strong ties that include a robust relationship with the private sector,”said DFC CEO Scott Nathan.
With over 120,000 customers financed to acquire mobility assets in the last five years, Mogo noted this has been the most definitive year in the sector with rapidly increasing uptake.
“The first quarter of 2024 has demonstrated the growing popularity of e-mobility. In the first three months alone, we financed as many e-bikes as we did in the whole of last year. We are proud that Eleving Group and Mogo Kenya, in partnership with DFC, have the opportunity to accelerate this positive shift towards more sustainable commuting. We are confident in the success of this cooperation,” said Eleving Group, CEO, Modestas Sudnius.
The Kenyan government has set a goal to reduce greenhouse gas emissions by 32% within the next six years, with a crucial component being the transition to zero-emission mobility. The transportation sector is a significant contributor, accounting for 67% of the country’s energy-related CO2 emissions and 11.3% of total greenhouse gas emissions.
In its updated Nationally Determined Contributions (NDCs) submitted to the United Nations Framework Convention on Climate Change (UNFCCC), Kenya has increased its carbon emission reduction ambitions from 30% to 32% by 2030.
The boda boda sector supports many low-income micro-entrepreneurs and micro-enterprises that typically lack access to financial products, including vehicle financing. With this investment, DFC and Mogo aim to positively impact Kenya’s development by providing essential zero-emission vehicle financing to individuals and businesses within the transportation sector.
Studies have shown that e-bikes can reduce operating costs by 30-35% due to savings on fuel expenses and maintenance. Petrol bikes require regular servicing every three to six months, whereas electric bikes need significantly less maintenance.
DFC is a federal agency and development finance institution of the U.S. government. It focuses on investing in development projects in lower and middle-income countries, collaborating with the private sector to address some of the most pressing challenges in the developing world. DFC’s investments span various sectors, including energy, healthcare, critical infrastructure, and technology.
Additionally, DFC supports small businesses and women entrepreneurs to promote job creation in emerging markets, ensuring that its investments uphold high standards for the environment, human rights, and worker rights.