Overview:
Absa Bank Uganda introduces UGX 19 billion loan facility for electric bikes, promoting green energy and financial inclusion in Uganda's informal sector.
KAMPALA, Uganda — Absa Bank Uganda has launched a UGX 19 billion loan facility to finance the adoption of electric bikes among commercial riders in the country.
The loan facility, provided to Mogo Uganda, a fintech company pioneering affordable electric bikes, aims to reduce carbon emissions and operating costs for riders in Uganda’s informal sector.
“This loan facility underscores our commitment to supporting Uganda’s transition to a low-carbon economy,” said David Wandera, executive director and head of markets for Absa Bank Uganda. “We believe that our clients’ stories are central to everything we do.”
Mogo Uganda has already made significant strides, financing nearly 870 electric bikes and reducing CO2 emissions by approximately 70 tons.
“Mogo Uganda has demonstrated significant investment in Uganda, with a net loan portfolio totaling 28 million EUR,” said Mikhail Vydryn, chief executive of Mogo Uganda. “Absa’s involvement through local currency funding mitigates Mogo Uganda’s FX risk.”
The electric bikes offer considerable cost savings, with charging costs of UGX 8,000 for 80 kilometers, compared with UGX 10,000 for 70 kilometers for fossil fuel-powered bikes.
According to World Bank data, Uganda’s informal sector accounts for 72 percent of businesses, 78 percent of the labor force and 51 percent of gross domestic product.
With this financing, Mogo Uganda projects reaching 1,000 electric motorbikes issued through hire purchase by the end of November.
The partnership aligns with Absa’s Environmental, Social and Governance values and Uganda’s National Development Plan III.