Boda boda riders at a fuel station in Nairobi. FILE PHOTO | NMG
US lender loans Sh155m to Kenya boda boda firm
A Mombasa-based lender which finances acquisition of motor cycle taxis (boda bodas) on credit has secured a Sh155 million ($1.5 million) loan from an American firm to boost its expansion in Kenya and grow its market share.
Watu Credit will under the deal use the capital arranged by US-based finance platform Lendable, to grow its capacity to finance the purchase of boda boda motorcycles on credit by more individuals.
“We’ve benefited from time and cost savings in using Lendable’s digital deal platform. This form of financing means Watu Credit can access working capital to grow its loan book without having to tie up its balance sheet,” said Watu Credit chief executive officer Andris Kaneps.
The lender says it plans to extend its geographical coverage across Kenya, moving into Central, Rift and Western regions by the end of next year. The funds have been secured using future repayments on loans advanced by Watu Credit to its boda boda clients.
Los Angeles-based Shinnecock Partners were the sole investor in the deal and marks its first investment in Africa.
“We’re proud to help Watu Credit scale up through the provision of credit and free access to analytics,” said Lendable chief executive and co-founder Daniel Goldfarb.
Lendable has in the past financed Uganda-based Tugende, who offer a lease-to-own model for Ugandan boda-boda drivers.
In 2015 the Motorcycle Assemblers Association of Kenya estimated that eight million Kenyans on average used a boda boda daily, generating Sh400 million in revenue.
Lendable says it targets alternative lenders whose customer base is small and micro businesses, to scale up their operations through access to technology-enabled structured financing.
Source: Daily Nation