On December 13, Charles M. became the first loan client to finish repaying his boda boda (motorcycle taxi) loan. Last year, we vetted a group of trusted boda boda drivers to pilot the loan. The learning curve was steep and we’ve learned a lot along the way about the risks and costs.

The boda boda market is crowded. Most drivers rent their motorcycles by the day and few take formal driving lessons. With such low barriers to entry, the competition has become pretty high. It also creates more risks as a loan product.

Drivers that rent can work a few days a week, but drivers paying off a loan can’t afford to take too many days off. It’s also a risky occupation. Besides the reckless driving of other taxis, boda boda drivers are police bait. In our area, the majority of taxi drivers are not licensed or insured. Safety issues like helmets, reflective vests, side mirrors and limits on the number of passengers are technically required by law but never really practiced. For informal or seasonal boda boda drivers, it’s easier to pay a bribe to the police. But we required loan clients to have a driver’s license and insurance. All those requirements add to the cost of an already expensive investment.

We’ve been able to adapt to some of the issues with better training, greater flexibility, and a mobile repayment option, but it remains a challenging loan to manage.

It makes Charles’ accomplishment all the more impressive. Promptly every Monday for the last 50 weeks, Charles has appeared at the Nuru office to make his loan payment. When asked about the secret to his success, he says there is no secret. “Ni rahisi, my friend,” (it’s easy) he drawls in his distinctive voice, “I work hard and I pay my loan every week.” All the money Charles earned from driving his boda boda he immediately set aside to make his next loan payment. He even used his farming income to pay for household expenses so that he could save all his taxi revenues for loan repayment. It’s not easy to be that disciplined, but by prioritizing his loan repayment Charles finished his loan three weeks early. With the same weekly payments he made toward renting a motorcycle, he now owns a valuable revenue-generating asset that he can count on as an additional source of income.