This is to ease cash flow pressures on their mainly boda-boda riding customers caused by Covid-19 related travel restrictions that have been imposed by governments in Kenya and Uganda.
Boda-bodas are motorcycle taxis commonly found in East Africa.
In Uganda for example, the government has extended a previous 14-day movement ban by another 21 days, till May 5th, 2020 and during the ban, motorcycle owners, including boda-bodas, are not allowed to carry passengers. Fare paying passengers are the biggest source of revenue for a bulk of Tugende’s clients, many of whom are boda-boda riders. Only riders carrying luggage are allowed to operate.
Riders are also not allowed to operate at night, due to a 7 pm – 06:30 am countrywide curfew. As a result, most boda-boda riders, have parked their bikes at home with no revenue to meet their weekly repayments to Tugende let alone, to fend for their families.
To ease this pain, Tugende on March 25th, 2020 first announced that their clients who would experience challenges and delays in making weekly repayments on their leases, as a result of the 14-day travel restrictions would not be charged the contractual late-payment penalties until April 25th, 2020. But, following a 21-day extension of the ban through to May 5th, 2020, Tugende has now announced a further extension on the moratorium till May 25th, 2020. However, customers are still encouraged to make whatever little payments they get, so as to reduce the repayment amounts after the 2-month moratorium.
To further ease on the pain of those whose incomes have been severely hit, Tugende is also making a one-time unconditional cash transfer of UGX25,000 (KES 700) to all of its 23,000+ active clients in both Uganda and Kenya- an equivalent of UGX575 million (KES16.1 million: USD152,370).
In a statement released today, Michael Wilkerson, the CEO Tugende, said that the support aims at “helping the Tugende community overcome the economic hardships they are facing as a result of the coronavirus pandemic.”
Bob Okodi, Amref Health Africa Uganda CFO, On Purpose-Driven Finance and Measuring Impact in Lives, Not Margins“Tugende exists to help informal sector entrepreneurs grow, thrive and own their future. With the COVID-19 pandemic, we know that our clients are struggling to take care of their families. When they suffer, we suffer too. This support is to let our clients know that we are together with them and together we shall pull through,” he said.
“Tugende is itself facing dire challenges. However, we are committed to being with our clients during the best and worst of times and we want to help our clients, their communities and our employees in Uganda and Kenya during this difficult period,” he further said.
Wilkerson also said that Tugende “would continue to look for more ways to help their clients during this period.”
To date, Tugende has enabled over 30,000 customers, mainly the youth, in Uganda and Kenya to own income-generating assets, mainly motorcycles. The company has since grown beyond motorcycles into new types of asset products–like cars and retail shop equipment, remains true to their core focus: enabling driven entrepreneurs to own their futures.
The company was formally established in 2012 in Uganda and is a technology-enabled asset financier of income-generating assets for proven entrepreneurs, using a lease-to-own product to offer an affordable path to ownership of these assets.
The company has over 17 branches across Uganda and Kenya.
Other than the leasing facility, Tugende’s package also includes training, value-added services like life and medical insurance, active customer support, high-quality safety equipment, driving permit support, and business development support after ownership.
