The loan, about USD10 million, increases sustainable mobility options for self-employed boda boda operators and SMEs in Kenya.
Mogo, a leading asset financier in Kenya, has secured a Sh1.3 billion loan facility from the US International Development Finance Corporation (IDFC) to expand its electric vehicle financing portfolio.
The loan, about USD10 million, increases sustainable mobility options for self-employed boda boda operators and SMEs in Kenya.
The seven-year loan comes just 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 Country manager Mr Domas Mineikis said the financing is in sync with Mogo’s ESG strategy “as we appreciate the future of mobility is electric.”
The funds Mr Mineikis said, will be deployed towards giving affordable loans to enable Kenyans to acquire sustainable electric vehicles.
“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 Mr Mineikis.
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.
IDFC CEO Scott Nathan revealed that IDFC is doubling down on its commitments to Kenya’s development, with investments into e-mobility and energy, among other sectors.
“The US and Kenya have strong ties that include a robust relationship with the private sector,” said Mr 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 IDFC, have the opportunity to accelerate this positive shift towards more sustainable commuting. We are confident in the success of this cooperation,” added Modestas Sudnius, the CEO of Eleving Group.
In recent years, Kenya has faced several climate change-related challenges, such as persistent droughts and floods.
The Kenyan government has set a goal to reduce greenhouse gas emissions by 32 percent 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 about 67 percent of the country’s energy-related carbon emissions and 11.3 percent of the total greenhouse gas emissions.
In its updated Nationally Determined Contributions (NDCs) submitted to the United Nations Framework Convention on Climate Change (UN-FCCC), Kenya has committed to reduce its carbon emissions from 30 percent to 32 percent 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, IDFC 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 percent to 35 percent 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.
IDFC is a federal agency and development finance institution of the US 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.
IDFC’s investments span various sectors, including energy, healthcare, critical infrastructure, and technology.
Additionally, IDFC 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.
About Eleving Group
Eleving Group has driven innovation in financial technology around the world since its foundation in Latvia in 2012.
As of today, the group operates in 16 markets and three continents, encouraging financial inclusion and upward social mobility in underserved communities around the globe.
Eleving Group has developed a multi-brand portfolio for its vehicle and consumer finance business lines.
About two-thirds of its portfolio comprise secured vehicle loans and mobility products, with Mogo as the leading brand, and around a third of the portfolio including unsecured consumer finance products, with Kredo and Tigo as the segment’s flagship brands.
Currently, 57 percent of the group’s portfolio is located in Europe, 30 percent in Africa, and 13 percent in the rest of the world.
The Group’s historical customer base exceeds 660,000 customers worldwide, while the total volume of loans issued goes beyond EUR 1.7 billion.
With headquarters in Latvia, Lithuania, and Estonia and a governance structure in Luxembourg, the Group ensures efficient and transparent business management, powered at the operational level by 2718 employees.
For two consecutive years, the group was listed among Europe’s 1000 fastest-growing companies published by the Financial Times in 2020 and 2021.