In the rapidly evolving landscape of East Africa, Watu, an asset fintech company, is not just transforming financial inclusion and mobility but also inspiring a new wave of hope and progress. By offering creative financing solutions, thousands of individuals have been empowered to launch and expand their businesses, particularly in the thriving two- and three-wheeler sector.

This industry has become a cornerstone for young entrepreneurs addressing last-mile transportation needs, including passenger and goods delivery services. Despite these advancements, access to capital remains a significant barrier for many aspiring business owners.

Before accessible asset financing, only a small fraction of Boda-Boda riders, often unbanked and underserved, owned their bikes. Today, thanks to strategic financial interventions, ownership has soared. Andrii Volokha, Watu’s General Manager for East Africa, notes, "We've made asset financing accessible and affordable, boosting industry growth and creating jobs for millions of young people."

This dramatic shift supports the United Nations’ Sustainable Development Goal (SDG) 8, promoting inclusive and sustainable economic growth and productive employment opportunities. Watu's efforts position it as a humble enabler in the sector.

Empowering entrepreneurs

Empowering young entrepreneurs, especially in underserved populations, is at the heart of this transformation. A dedicated customer success department and field marketing team provide crucial business and financial management training, ensuring these young entrepreneurs are equipped to handle their ventures. "Our model empowers entrepreneurs with training and support," says Volokha.

This support, combined with flexible payment terms (loans take as little as two hours to process) and a pay-as-you-go model, where entrepreneurs pay for the asset as they use it, has encouraged many entrepreneurs to manage their loan repayments effectively. Such approaches have enabled numerous youths to access motorcycles, tuk-tuks, and phones for income-generating activities, significantly boosting self-employment in the region.

The success of these initiatives is evident in the dramatic rise of Boda-Boda ownership. Previously, only one in ten riders owned their bikes, but now, nine have achieved ownership through accessible financing. This shift has stimulated broader economic growth in the region. With over 400 million people living in poverty in Africa (IFC), increasing access to financial services can help create a much more sustainable economic landscape, helping these entrepreneurs lift themselves out of poverty.

Commitment to sustainability

Environmental sustainability has emerged as a cornerstone of financial innovation in East Africa, with fintech companies leading toward a greener future. By 2030, Watu aims to finance over half a million electric motorbikes, significantly reducing reliance on fossil fuels and lowering carbon emissions.

"We are committed to promoting sustainable practices," emphasises Volokha, instilling confidence in the audience about the future of East Africa's environment. This ambitious initiative aligns with SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action).

Watu's dedication to sustainability is evident through its proactive approach to green mobility. Since March 2022, it has financed over 1,000 electric bikes in Rwanda, positively impacting over 6,000 individuals. By the end of 2023, over 2,000 electric bikes were financed across Kenya, Rwanda, and Uganda. These efforts form a broader strategy to integrate sustainability into core operations, supporting environmental goals and economic development.

This focus on green mobility contributes to environmental conservation and drives economic growth by creating new opportunities for regional entrepreneurs. Financing electric motorbikes helps reduce transportation costs and fosters a sustainable business ecosystem. As Volokha notes, "Our initiatives are designed to promote long-term environmental and economic benefits, ensuring a balanced approach to development." Such initiatives are critical as Africa faces increasing environmental challenges; transitioning to green energy solutions is vital for sustainable economic growth.

Watu sets a precedent for other regional financial institutions by championing sustainable practices and green mobility. Its commitment to financing environmentally friendly transportation options underscores the significant impact that targeted financial strategies can have on local communities and broader environmental objectives.

Strategic partnerships

Strategic partnerships with governments and private entities have been crucial in Watu’s efforts to reassure the audience about the collaborative spirit in East Africa. In Tanzania, a collaboration with TRi has introduced electric motorcycles and tuk-tuks. The company works with ARC Ride, Spiro, Ampersand, and other EV players in Kenya to promote electric mobility.

Uganda has seen similar success through a partnership with GOGO Electric, which provides affordable financing for electric motorcycles and fosters the growth of sustainable transport solutions. "Our success relies on strong partnerships," notes Volokha. These collaborations transform the industry and bring about positive impacts, creating an ecosystem supporting sustainable development.

These partnerships are not just about financial growth but also about creating an ecosystem that supports sustainable development. For instance, the collaboration with Ampersand in Rwanda has been pivotal in advancing electric mobility, aligning with Rwanda’s ambitious environmental goals. Such partnerships illustrate a comprehensive approach to tackling the region's economic and environmental challenges.

Leveraging technology

Advanced technology plays a vital role in enhancing services. Telemetrics and GPS tracking ensure vehicle security and efficient fleet management. "We've integrated advanced telemetrics and GPS tracking in our vehicles to ensure security and efficiency," explains Volokha. A mobile app allows customers to make payments, track loan statuses, and receive real-time support, improving operational efficiency and customer satisfaction. This technological integration enhances customer experience and operational transparency.

The mobile app has been particularly transformative, providing a seamless interface for users to manage their finances. This technology enhances user experience and significantly reduces operational downtime, increasing overall efficiency. By leveraging such technological advancements, the company ensures its services remain at the cutting edge of financial innovation. The app allows customers to make payments, track loan statuses, and receive real-time support, improving operational efficiency and customer satisfaction.

Promoting gender equality

Inclusivity lies at the heart of Watu's business model, ensuring that women entrepreneurs receive equal opportunities. Women constitute a significant portion of Watu's top clients, with 60 percent of consistent payers being women. Linah Momanyi from the Coast Region of Kenya exemplifies this success: starting with one tuk-tuk, she has expanded to owning over 70, employing 82 individuals, and diversifying into a spare parts supplier.

"Our inclusive model ensures women entrepreneurs thrive," highlights Volokha. This focus on gender equality is a social initiative and a strategic business decision. Research by McKinsey & Company indicates that advancing gender equality could add $12 trillion to global GDP by 2025. By promoting inclusivity, Watu taps into a significant driver of economic growth, enhancing its impact on regional development.

Future expansion

Plans are in place to expand into more countries within East Africa and beyond. The focus remains on driving economic growth and empowering livelihoods through innovative, inclusive, and sustainable solutions. "We aim to expand our presence and explore new markets," states Volokha.

The growing demand for affordable transportation and financial services across the continent informs Watu's expansion strategy. Its proactive approach to identifying and entering new markets will sustain its growth trajectory. With over 200 million people aged between 15 and 24, Africa has the youngest population in the world, and this demographic trend is expected to continue. By 2050, this youth population is projected to double, presenting both a challenge and an opportunity for businesses and policymakers alike.

This article was authored by Jasper Andrew Kwayu, email [email protected]