Gozem, IFC partner on $10M moto-taxi financing project

Ride-hailing app Gozem and the International Finance Corporation (IFC) are embarking on a $10 million project to help motorcycle-taxi (moto-taxi) drivers in Togo and Benin access affordable vehicle financing.

Gozem said there are around 12 million moto-taxi drivers in West and Central Africa that operate in a mostly informal economy. Most moto-taxi drivers do not have access to traditional banks and micro-finance institutions to fund their vehicles and instead often rely on money lenders that charge higher interest rates, often above 70% annually.

Launched in Lomé, Togo in 2018, Gozem began as a single moto-taxi ride-hailing service and has since evolved into a self-proclaimed "super app" with a portfolio of services that includes transport of passengers and goods, e-commerce and food delivery, financing, and plans for digital banking.

Gozem began providing vehicle financing to its drivers 14 months ago and has now helped more than 2,000 drivers acquire vehicles with affordable financing, it said in an emailed statement.

Through this partnership, the two groups will finance new vehicles for 6,000 drivers and build a platform that will enable Gozem to finance millions more.

"Moto-taxi drivers in West and Central Africa will need access to $3 billion of credit facilities annually to finance the replacement of their vehicles," said Gregory Costamagna, co-founder and co-CEO of Gozem.

Renewable rides

Over the next 12 months, Gozem and IFC will also work together to test electric bikes in moto-taxi operating conditions and build a green battery swapping station network in Togo and Benin.

The project aims to validate that electric bikes are a suitable replacement for the current petrol bikes and that their adoption at scale will not only be good for the environment but will also help drivers save money through lower energy and maintenance costs.

"Electric vehicles have the power to transform the moto-taxi market in West and Central Africa by lowering carbon emissions and lowering operating costs for drivers. By working with Gozem, we will increase affordable and green financing solutions for moto-taxi drivers to shift to electric bikes", said Aliou Maiga, IFC’s regional director for West and Central Africa.

"We hope IFC’s investment for these underserved communities will encourage other investors and accelerate the reduction of poverty and greenhouse gasses emissions in these markets," Maiga added.

IFC, a member of the World Bank Group, is the largest global development institution focused on the private sector in emerging markets.

Gozem raised $5 million in a Series A round in December 2021, helping boost plans for expansion and bringing its total raised to date to $12 million.

The company currently operates in 13 cities across Togo, Benin, Gabon and Cameroon with more than 1 million registered users who have completed over 10 million trips since its launch in November 2018.

*Top image is of Gozem moto-taxi drivers. (Source: Gozem).

— The Staff, Connecting Africa