Despite numerous efforts by the government to regulate the boda boda sector through enacting the National Transport and Safety Authority (Operation of Motorcycles) Regulations 2015 and establishing a boda boda taskforce in 2019, the sector remains informal and inadequately regulated.
The boda boda business serves as a vital source of income, especially for the youth, generating over 1.5 million direct jobs. With its low capital requirements, many young individuals embark on their micro-entrepreneurial journey by initially working as riders for motorcycle owners and later transitioning to ownership through a pay-to-own model. The business has evolved into a fully-fledged subsector, featuring a profitable end-to-end value chain encompassing motorbike importers, assemblers, dealers, spare part dealers, technicians, riding schools, and e-riding apps, among others.
The Kenya Institute of Public Policy Research and Analysis highlights the sector’s significance not only in job creation but also in government revenue, estimated at Ksh 60 Billion annually.
While some boda boda operators have obtained operating licenses, formed saving and credit societies, acquired insurance covers, and established self-help groups, a consensus is growing that the sector needs further streamlining to eliminate errant operators and foster better relationships with the public and authorities.
This refinement is crucial in mitigating negative aspects such as insecurity and accidents resulting from reckless driving, which account for over 65% of accidents and contribute to nearly 32% of insecurity cases, according to the National Transport and Safety Authority (NTSA) survey.
Implementing a robust regulatory regime will facilitate the acquisition and maintenance of ownership data, a crucial aspect of maintaining a comprehensive register of motorcycle acquisitions. Companies like Watu Credit, pioneers of the pay-to-own model, possess valuable data on the acquisition, rider training, and issuance of financial and life skills training certificates. Followup interaction also gives boda boda riders new opportunities to learn motorcycle service and maintenance skills, thereby enabling them to enjoy better returns from their investment.
Moreover, the lack of road safety skills among most riders and their absence from registered groups make it challenging to identify them in case of accidents. A comprehensive legislative and regulatory framework is essential to mandate licensing for all riders, similar to car owners, and to gather data for collaboration with insurance companies to offer affordable and flexible products.
Efforts to digitise licensing, registration, and insurance processes have made progress, and it is crucial to advance these initiatives for more sustainable outcomes. Registering and licensing boda boda operators, coupled with promoting insurance uptake, presents an opportunity to transform the sector into a safer, more professional, and economically viable industry.
It is therefore important to further advance the efforts put in place by both public and private sector players for more sustainable outcomes. By registering and licensing boda boda operators and promoting insurance uptake, Kenya has the opportunity to transform the sector into a safer, more professional, and economically viable industry. Government support, streamlined processes, and public awareness campaigns are vital for sustainable growth in the boda boda sector.
Introducing new technologies allows boda boda operators to create credit data profiles for future acquisitions, including electric motorcycles. Digital apps and tracking capabilities enhance the security of motorcycle owners, providing peace of mind during work.
Formalisation also facilitates the provision of services to operators, such as open medical clinics, to improve mental health and general well-being. Operators can access financial assistance through groups, such as the Hustler Fund, to raise deposits for acquiring new motorcycles.
Companies such as Watu contribute to public education and awareness through initiatives like Watu Shule, a safety training school available in Nairobi, Kiambu, Kilifi, Mombasa, Bungoma and Kakamega. The asset financing company provides classes to riders for as low as Ksh 300 weekly, encouraging riders to learn safe riding and to take up licences before operation. In partnership with agencies such as NTSA, the company also encourages boda boda riders to register in associations near them, which helps with traceability and national planning for the sector.
By Erick Massawe, Country Manager for Watu Credit