How to Finance Bikes and Electric Vehicles in Kenya?

The two-wheeler market in Kenya is projected to experience substantial growth, with a Compound Annual Growth Rate (CAGR) exceeding 5% during the period from 2024 to 2028. 

This anticipated growth is driven by several key factors, including an increase in per capita income among Kenyans, a growing demand for affordable transportation options within the country, worsening traffic congestion, and the rise in fuel prices, making two-wheelers a more economical and convenient mode of transportation.

On top of it, electric vehicles (EV) are on the rise too. In 2023, Kenya had 2,079 registered electric vehicles. However, the goal is to significantly increase this number, aiming for electric vehicles to make up 5% of all registered vehicles in the country by the year 2025.

But for many, the big price tags on these cool rides put the brakes on their dreams. Don’t give up yet! Kenya has financing options to help make your two-wheeled or electric vehicle a reality without emptying your wallet.

Whether you want a powerful bike or an eco-friendly electric car, this is your roadmap to owning that dream vehicle without going broke. We’ll help you cruise in style while keeping your bank account happy too. Rev up your engines, the affordable journey to your new sweet ride starts now!

How to Finance Bikes and Electric Vehicles in Kenya?

Financing a bike or EV in Kenya involves a few key steps:

1. Comparison Shopping: Research different bike and EV models alongside the financing options offered by dealers or directly from financing companies. Pay attention to the sticker price, any dealer incentives, and the variety of financing plans available. This will help you identify the most budget-friendly option that aligns with your desired vehicle.
2. Picking Your Lender: Once you’ve narrowed down your vehicle choices, it’s time to compare loan offers from various lenders. Here’s where close scrutiny comes in: examine the interest rates, loan terms (repayment duration), and down payment requirements. Don’t be afraid to negotiate for a better deal, especially if you have a good credit score.
3. Gearing Up for Approval: Prepare the necessary documents, which may include your Kenyan ID, proof of income (payslips or M-PESA statements), and sometimes collateral depending on the lender. A strong credit history can significantly improve your chances of loan approval and secure you favorable terms.
4. Understanding your Loan Approval: The lender will assess your creditworthiness and determine your loan eligibility to move ahead in the process. This process might involve a credit check and an evaluation of your income and debt-to-income ratio.
5. Hitting the Road: Once approved, finalize the paperwork and get ready to enjoy the freedom of your new ride! Remember to factor in registration fees and insurance costs when budgeting for your new vehicle.

Financing Companies Gearing Up Kenya

The Kenyan market is seeing a surge in financing options for both traditional bikes and EVs. Here are some prominent players to consider:

• MOGO: A leader in vehicle financing, MOGO offers quick and flexible loans for boda bodas (motorcycles) with a low down payment. They are known for their efficient application process, making it possible to secure a loan and ride away with your new electric motorbike within a few hours.
• KCB: Kenya’s largest bank, KCB, has joined forces with the government to provide EVs, motorbikes, and tuk-tuk financing programs. This initiative aims to promote a shift towards environmentally friendly transportation options. KCB offers competitive rates and flexible loan terms to make electric vehicles more accessible to a wider range of Kenyans.
• Watu Africa: Committed to financing EVs and motorbikes, Watu Africa is a local provider that aims to make electric vehicles more accessible in Kenya. They recognize the environmental and economic benefits of electric vehicles and are working to bridge the affordability gap for potential EV owners. Watu Credit offers financing solutions for a variety of electric vehicle models, including motorbikes, cars, and tuk-tuks.
• M-KOPA: The largest financier of electric motorbikes in Kenya, M-KOPA offers financing solutions specifically for EVs. They understand the unique challenges that come with purchasing an electric vehicle and have tailored their loan products to address those needs. M-KOPA’s financing options are known for their flexible repayment structures and focus on making EVs an attractive choice for budget-minded consumers.

Tips for a Smooth Financing Experience

Here are some solid, actionable tips you can leverage for a better financing experience:

Build and Maintain Good Credit

Having a strong credit history and score is vital when seeking financing for a bike or electric vehicle in Kenya. Lenders will closely examine your creditworthiness to determine your ability to repay the loan. A higher credit score not only increases your chances of approval but also qualifies you for more favorable interest rates and terms.

To build and maintain a good credit score, make it a habit to pay all your loans and bills on time. Late or missed payments can significantly damage your credit rating. It’s also advisable to regularly check your credit report for any errors or inaccuracies and dispute them promptly.

Compare Multiple Lenders

To ensure you’re getting the best deal, it’s crucial to shop around and compare offers from various lenders. This could include banks, dealerships, and specialized financing companies. Each lender may have different terms, interest rates, fees, and down payment requirements.

Don’t just focus on the interest rate – consider the overall cost of the loan, including any additional fees or charges. Negotiating power increases when you have multiple options to leverage.

Understand and Negotiate Contract Terms

Before signing any financing agreement, take the time to thoroughly read and understand all the terms and conditions. Don’t hesitate to ask questions about any clauses or provisions that seem unclear or ambiguous.

If possible, try to negotiate the interest rate, fees, and repayment schedule to better suit your financial situation. Lenders may be willing to offer more favorable terms, especially if you have a strong credit profile and can demonstrate your ability to repay the loan.

Opt for a Shorter Loan Term

While longer loan terms may result in lower monthly payments, they also mean paying more interest over the life of the loan. If your budget allows, consider opting for a shorter loan term to minimize the total interest paid.

However, it’s essential to strike a balance and ensure that the monthly payments are still manageable and don’t strain your finances.

Bottom Line

Owning your dream bike or electric vehicle in Kenya is an achievable goal with the right financing strategy. While the upfront costs may seem daunting, the options available in the Kenyan market provide ample opportunities to make your automotive aspirations a reality without breaking the bank.

Ultimately, the key to success lies in responsible financial planning and budgeting. Carefully consider the associated costs, such as insurance, maintenance, and fuel or charging expenses, to ensure that your new ride doesn’t become a financial burden.

For those seeking a reliable platform to buy or sell motorcycles and parts, Boda Boda 360 is a trusted name in the Kenyan market.So, what are you waiting for? Embrace the adventure and start your financing journey today. Buy your dream bike with Boda Boda 360!