Tugende means “let’s go!” in Luganda, the main local language in Kampala, the capital city of Uganda. Tugende is also the name of Michael Wilkerson’s company, a financial inclusion startup in Uganda that provides motorcycles to recommended drivers in a lease-to-own arrangement. If paid on time, the drivers own the bike after 19 months or less.
From the stage of SOCAP15, Michael asks the audience to consider a different take on funding, thinking more about what can happen when people at the bottom of the pyramid can make investments in their own community.
Motorcycle taxis (bodas) are an enormous industry in East Africa, especially in countries like Uganda where 70% of the population is under 25 and unemployment is high.
In Uganda, Michael explains, motorcycles help people move through traffic in cities, they help people in rural areas get where they need to go when there is no public transport, and they literally drive the economy.
However, driving a motorcycle taxi is difficult for many drivers because they can’t afford the upfront cost to buy their own bike. Instead, they end up renting from landlords indefinitely with no fixed contract, no end in sight, and no ability to build assets or stability.
“At Tugende we call this the rental poverty trap. Drivers earn enough to pay their rent and stay in the business but not enough to accumulate savings or move up in life.”
Tugende, he says, solves this problem with a fair, transparent, lease-to-own model. (Watch a 40 second video on how they do it.)
“We know that a driver who owns his own motorcycle goes from taking home about $5 a day to $10 a day. We also think about impact at the household level — the average household size in Uganda is five people, and if you can double the income of one of the primary breadwinners in that household from $5 a day to $10 a day, you’re literally lifting the entire household above the $2 a day poverty line.”
“Our customers are already moving themselves forward in life, we just provide an opportunity for them to do it faster,” Michael notes.
