Why Nigerian Mobility Startup Motor Africa Has Diversified Into Lending
In a move to fuel the growth of the African mobility industry, Motor Africa, a tech startup providing IoT infrastructure for transportation in Nigeria, and OnePipe, a fintech infrastructure provider, have joined forces to launch a revolutionary lending as a service (LaaS) proposition.
The LaaS technology enables mobility entrepreneurs to access working capital in the form of an overdraft to fund essential expenses such as vehicle repairs, purchasing genuine spare parts, vehicle and personal insurance, smartphones, and cash for personal and family welfare support needs.
What sets this LaaS proposition apart from others is its intelligent use of analytical telemetry and remittance income data to assist registered lenders in making informed lending decisions while also managing seamless credit repayments.
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Motor Africa, under the trade name of envio Logistics Inc., already has more than 2,000 vehicles on its platform, and this new service enables vehicle owners to access credit services easily. The platform allows vehicle owners to lease their cars to verified drivers on e-hailing services and local transport services while seamlessly managing driver repayments to the vehicle owner and providing car maintenance oversight at partnered workshops.
Sylvester Chude, the visionary co-founder and CEO of envio Logistics Inc., sees this collaboration with OnePipe as a crucial step in driving the growth of the African economy. According to him, “commercial transportation is a crucial service for the growth of any economy, and the role of technology and innovation is essential for its success in Africa.”
With the African commercial mobility market estimated to be worth $150Bn, the LaaS infrastructure created by OnePipe and Motor Africa will address the challenges African mobility entrepreneurs face when trying to get working capital financing.
The Motor Africa technology is available on both the Google Play store and Apple Appstore, allowing mobility entrepreneurs to register their vehicles and have their overdraft wallets instantly credited with N600,000. Once the vehicle is displayed on the mygarage platform to verified drivers, the mobility entrepreneur is charged a vehicle and activation fee of N15,000.
This LaaS infrastructure, utilizing hybrid telemetry IOT systems, empowers lending partners to create loan products with interest rates and repayment terms, manage credit requests, conduct automatic underwriting, cash disbursement, and repayment collection. The intelligent repayment collection service enables credit subscribers to make repayments via bank transfer to a dedicated repayment wallet before due dates. If there is a repayment default, the system automatically disables the engine of the collateralized vehicle and shares the geo-location with Motor Africa recovery agents.
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The Motor Africa service is recommended for hosts leasing out cars for e-hailing services or local last-mile transport services, drivers seeking cars on short-term lease or hire purchase, and financial institutions offering drive-to-own services or lending.
With services now offered in Lagos, Abuja, Ibadan, Benin, and Portharcourt, Motor Africa aims to announce further locations in the second quarter of 2023.
Motor Africa’s partnership with OnePipe to launch a lending as a service (LaaS) proposition is a strategic move aimed at diversifying its revenue streams beyond its core business of providing mobility and IoT infrastructure. This move enables Motor Africa to tap into the $150 billion commercial mobility market in Africa and generate additional income from interest and fees on the loans.
By providing access to credit services, Motor Africa can potentially increase the usage of its platform. This can help to attract new customers and retain existing ones by providing them with a more comprehensive solution that addresses their financing needs.
Through offering lending services, Motor Africa also hopes to differentiate itself from other mobility platforms in the market and build a competitive advantage.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer, who has several years of experience working in Africa’s burgeoning tech startup industry. He has closed multi-million dollar deals bordering on venture capital, private equity, intellectual property (trademark, patent or design, etc.), mergers and acquisitions, in countries such as in the Delaware, New York, UK, Singapore, British Virgin Islands, South Africa, Nigeria etc. He’s also a corporate governance and cross-border data privacy and tax expert.
As an award-winning writer and researcher, he is passionate about telling the African startup story, and is one of the continent’s pioneers in this regard