Kenya’s roads are witnessing a quiet but profound
transformation.
In cities and villages alike, electric motorcycles,
popularly known as e-bikes are beginning to replace traditional petrol-powered
boda-bodas.
Over the last few years, there has been an upswing in people
riding electric bikes, whether for delivering goods, as a shared bike, or for
everyday travel.
The electrically powered cycles have gained popularity in
recent years since they can cover longer distances than traditional pedal bikes
and require less effort.
A big reason for this shift is the non-banked lenders who
offer tailored, flexible financing solutions, living up to the carbon
neutrality which Kenya has committed to achieving net-zero emissions from the
energy sector by the year 2050.
These solutions have enabled boda boda and tuk tuk riders to
access loans.
A recent report, The ‘New’ Boda-Boda Boom: Thriving Societies,
Growing Economies, and Powering Green Transition, underscores the
transformative evolution of the boda-boda sector.
It highlights that millions of Kenyans depend on boda-bodas
daily for commuting, education and market access.
Beyond its economic significance, the sector drives profound
social impact, enabling over 2.5 million operators to support their families.
The report notes that boda-boda operators earn an average of
Sh1,100 daily across six working days, collectively contributing Sh660 billion
annually.
This income sustains households and fuels local economies by
boosting spending in small businesses and markets.
With Kenya’s GDP estimated at Sh15.11 trillion by the
Central Bank of Kenya, the boda-boda sector accounts for at least 4.4 per cent
of the nation’s GDP.
As the push for eco-friendly alternatives to petrol is
gaining traction, for boda-boda riders the narrative is different, getting
affordable financing to make that switch is still a tough hurdle.
These riders, who keep the country moving, often find
themselves stuck when it comes to accessing loans for electric motorcycles.
Traditional banks aren’t making it easy.
They are wary, pointing to things like a lack of collateral,
questions about battery technology, the risk of loan defaults from informal
workers and the fact that there’s no solid market for reselling e-bikes.
As a result, boda-boda riders have been left with few
options to afford the electric bikes they need.
Non-banked lenders such as Watu and Mogo, along with
fintech-driven mobility startups, are stepping up.
They are offering financing that works for many riders.
Some non-banked lenders go beyond just offering loans, they
offer extra services like maintenance, insurance covers, and battery swaps to
keep e-bikes running smoothly. These all-in-one packages protect riders’ incomes
by ensuring their bikes stay on the road while safeguarding the lenders’
investments.
Recognizing the environmental wins of going electric, many
of these lenders are teaming up with manufacturers who prioritize
sustainability, like those running battery recycling programs or ethically
sourcing materials.
Together, they’re building an ecosystem that’s not just
about swapping out petrol engines for electric ones—it’s about creating a
greener, circular economy that benefits everyone.
On top of that, these lenders are weaving financial literacy
and safety training into their loan packages.
This empowers riders to manage their money wisely, ride more
safely, and contribute to a more professional, reliable supply chain. It’s a
holistic approach that’s setting riders up for long-term success.
As the world zeroes in on cutting emissions, Kenya’s shift
to e-bikes is a big deal. It’s not just about cleaner transport—it’s a key move
toward hitting the country’s climate goals, making the boda-boda sector a
surprising but powerful player in the fight for a sustainable future.
Non-banked lenders are assisting the country to achieve its
Nationally Determined Contributions (NDC) by aligning their products with
Environmental, Social, and Governance (ESG) principles through the promotion
electric motorcycle adoption.
For instance, their
financing models, often accompanied by incentives for purchasing e-bikes, are
key to reducing the country’s transport sector emissions, improving the
performance of the logistics industry whose performance has deteriorated over
time.
Most importantly, through easing access to e-bike ownership,
non-bank lenders are helping to decarbonize the very arteries through which
Kenya’s goods, services, and people flow.
Despite this remarkable progress, significant challenges
remain.
High interest rates continue to burden many riders, and the
absence of widespread charging infrastructure, particularly in rural areas,
threatens to slow the adoption of e-bikes.
The government’s ongoing efforts to develop a National
E-Mobility Policy and invest in charging infrastructure are promising steps in
the right direction, however, there is also a need for policies that
incentivise green transport
Volokha
is Watu Credit general manager, East Africa, - [email protected] and Mutea is
Mogo Auto Ltd deputy country manager, [email protected]
