Uganda’s Tugende has received a $5m loan from the Overseas Private Investment Corporation (OPIC) to support small business lending and expanded transportation in Uganda by providing lease-to-own financing to motorcycle taxi drivers.
In 2015, Tugende raised a $780,000 in equity and debt from the Segal Family Foundation and Echoing Green and a number of private angel investors, including previous Tugende investors. Earlier, Tugende had raised a round of $300,000 from impact-oriented angel investors, with many drawn to Tugende through the Unreasonable Institute.
Founded in 2010, Tugende has to date served more than 12,000 customers — 5,000 of whom have already purchased their motorcycle taxis outright. The business, will use the OPIC loan to scale up its successful operations in Uganda, and offer a path to ownership and higher income for many more of the estimated one million full time motorcycle taxi drivers in East Africa.
Tugende, which means “let’s go,” was founded by American Michael Wilkerson who spent time as a Fulbright scholar and a journalist in Uganda and discovered that “bodas” or motorcycle taxis, were a critical part of the country’s transportation infrastructure. As he got to know more boda drivers he also learned that many worked long hours but could not attain financial security since they could not access the credit to purchase their own bodas.
“By supporting Uganda’s boda drivers, we are empowering local entrepreneurs while also helping to strengthen a key mode of transportation in Uganda,” said Ray W. Washburne, OPIC President and CEO. “This project will advance OPIC’s new Connect Africa initiative to invest in transportation, technology and value chains across the continent.”
In addition to promoting boda ownership, Tugende offers drivers training on safety, financial planning and customer service. Drivers can typically take ownership of a boda in 20 months, which can result in them doubling their take home income. Many of these borrowers have used this additional income to invest in healthcare and education for their families, or to start additional small businesses and create more jobs.
“Bodas are a key source of transportation in Uganda, but for boda drivers and many other small business operators access to capital has always been the biggest challenge,” said Tugende Founder and CEO Michael Wilkerson. “OPIC’s financing will help us provide financial security, asset ownership and higher income for thousands of additional drivers and improved quality of life for tens of thousands of their family members.”