In its first pre-Series equity and debt funding, Ugandan asset financing startup– Asaak has secured $30 million according to Techcrunch. The company helps bodaboda riders in motorcycle financing using financial and behavioral data like their earnings, trips made and their ratings from platforms like Bolt, Jumia, Safeboda, and Uber.
Asaak offers motorbike financing to operators, who are often locked out by formal banking institutions due to the high level of security requirements comprising income history and regular account activity which in most cases they don’t have.
This means that bodaboda riders are now able to own the motorcycles they ride, through Asaak compared to previously when most of them were either employed by bike owners or were renting or leasing the motorcycles.
Asaak’s credit score system
To provide a level of security with the financing, Asaak uses rider data from platforms like Safeboda and Jumia to create a credit score of the borrowers. Borrowers can also use the Asaak app or physically visit their branches to know if they qualify for the financing. According to Techcrunch, drivers usually receive motorcycle financing (about $1,500 worth of credit) within three days of signing up, and pay an interest of between 1 to 4% depending on their credit score.
Born in Soroti district in 2016, Asaak, changed strategy to bodaboda financing in 2019 after a period of lending to farmers then SMEs. The startup has so far financed the purchase of 5,000 motorcycles and has also started providing smartphones and fuel financing to the operators. In partnership with Samsung and Standard Chartered bank, the company aims to drive smartphone ownership among motorcycle taxi operators. In December 2021, the company announced another partnership with Untapped Global, an investment company focussing on emerging markets to provide financing for more than 2,000 motorcycles over the next 12 months, and soon plans to enter 6 new African markets.
