Besides having an objective of making a profit, several African based startups are working tirelessly to change the lives of communities. That is the case with a Ugandan based motorcycle taxis startup, Tugende. The startup got its name from a Ugandan word tugende meaning “let us go”. Motorcycle taxis which are known by many plays an important part in the growth of the Ugandan economy. Founded by American citizen Michael Wilkerson six years ago, Tugende has made significant steps in transforming the lives of the locals. The startup has empowered the locals economically by offering lease-to-own funding for motorcycle riders.
The startup has received an overwhelming reception since its launch. Currently, it has more than 150 employees under its umbrella who get their daily living from the startup. The employees do attend to more than 12,000 motorcycle taxis riders and 5,000 have been able to buy their motorcycle taxis. Apart from lease-to-own funding, Tugende also offers other services like safety training, customer service, and financial planning for riders. The startup’s business model allows riders to have full ownership of the taxis for 20 months.
Tugende announced that it has sourced for a loan worth $5 million from Overseas Private Investment Corporation (OPIC). OPIC is a self-sustaining US Government agency which offers grounds that allows businesses in America to invest in upcoming markets. Tugende is planning to use the funding to increase on its credit facilitation of small businesses and work on its plans of expanding the Ugandan transportation venture. OPIC is currently present in over 160 countries globally, and it has put in place mechanisms to cater to issues like a partnership, advocacy, political risk insurance, and financing. The platform has helped to facilitate the growth of business in given regions by providing resources that are vital to the management of challenges linked to foreign direct investment.
In a media statement released by OPIC, Tugende’s plans to expand into other countries in Eastern Africa will get a huge boost basing on its recent growth in Uganda. Michael started the startup with the aim of economic growth to riders of Bodas who spent long hours working, but still, their financial security was not convincing. This was majorly due to failure to access loans that could help them buy their Bodas. According to the CEO, many small business operators in Uganda has always had the biggest challenge in accessing capital. He added that the secured loans are of importance to his startup’s operations in that it will offer financial security, ownership of the asset and increased income for many Boda riders. This will in turn help in improving the living standards of many Ugandan families that will become financially secure and self-sufficient.
According to OPIC President and CEO, Ray W. Washburne, supporting Ugandan Boda riders helps to empower local entrepreneurs and also to assist in strengthening an important mode of Ugandan transportation. He added that the project would cement the goal of Connect Africa a new initiative of OPIC that aims at impacting areas such as transportation, technology and many other sectors in Africa. The move by OPIC to channel capital into Ugandan startup comes after many companies channeled debt and equity funding to different startups. The companies include Echoing Green, Segal Family Foundation, some private angel investors and some impact investors from Tugende.