KAMPALA, Uganda — In a significant push toward environmentally friendly transportation, Absa Bank Uganda has announced a $5 million loan facility to Mogo Loans, a fintech company pioneering affordable electric bikes for Uganda’s informal sector.
The partnership, aimed at reducing carbon emissions and operating costs for commercial riders, underscores Uganda’s efforts to transition to a low-carbon economy.
“This deal goes beyond a typical loan transaction,” said David Wandera, executive director and head of markets for Absa Bank Uganda. “It drives financial inclusion, delivers credit to the last mile and contributes to a green economy.”
Uganda’s informal sector accounts for 72 percent of businesses, 78 percent of the labor force and 51 percent of gross domestic product, according to World Bank data. The government aims to reduce the sector’s size from 51 percent to 45 percent by 2025.
Mogo Uganda has already made significant strides, financing nearly 870 electric bikes and reducing CO2 emissions by approximately 70 tons.
“Since our launch in May, we have enabled our clients to travel over 2.5 million kilometers using clean electricity,” said Mikhail Vydryn, chief executive of Mogo Uganda. “This initiative has created substantial economic benefits for riders and reduced emissions.”
The electric bikes offer considerable cost savings, with charging costs of 8,000 Ugandan shillings for 80 kilometers, compared with 10,000 shillings for 70 kilometers for fossil fuel-powered bikes.
Wandera emphasized Absa’s commitment to supporting clients’ growth. “We believe our clients’ stories are central to everything we do,” he said.
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.
